Investing.com — S&P Global Ratings has revised Trinidad and Tobago’s outlook to negative from stable while affirming its ‘BBB-/A-3’ credit ratings.
The rating agency cited ongoing weakness in the country’s finances and gradually eroding fiscal and external buffers as key factors behind the outlook change announced Thursday.
S&P noted that limited progress in economic diversification has left the Caribbean nation vulnerable to volatile energy prices, while oil and gas production has recently declined. The energy sector typically represents more than one-quarter of GDP and government revenues, and almost 80% of exports.
The agency projects economic growth of just 1% in both 2025 and 2026, with GDP per capita expected to reach nearly $19,200 by year-end. This 10-year weighted-average real GDP per capita growth of 0.85% falls below that of countries with similar income levels.
S&P forecasts a general government deficit of 6.0% of GDP in fiscal 2025, slightly down from 6.1% in 2024. The deficit is expected to average 2.3% for fiscal years 2026-2028, with net general government debt change averaging 3.1% of GDP from 2025-2027.
The government faces elevated financing needs in 2026 with a $1 billion external bond maturing in summer. However, substantial government liquid assets, including the Heritage and Stabilisation Fund (HSF), mitigate economic cycle effects on finances. These assets will represent about 51% of GDP during the outlook horizon.
Despite these challenges, S&P expects a current account surplus averaging about 7.2% of GDP from 2025-2027, supported by energy exports. The agency also noted that Trinidad and Tobago’s stable parliamentary democracy and social stability will anchor political stability and policy predictability.
The United National Congress, led by Kamla Persad-Bissessar, won a majority in elections held in April 2025. The new government has cancelled the proposed Revenue Authority and a recently introduced property tax while increasing health care and education spending.
S&P indicated it could lower the ratings over the next 6-24 months if the government fails to take corrective steps to strengthen public finances, ensure balanced economic growth, and maintain the country’s strong external profile. Conversely, the outlook could return to stable if government policies improve fiscal sustainability and lead to more favorable long-term growth prospects.
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