No change to credit rating

PORT-OF-SPAIN – Moody’s Investors Service has reaffirmed Trinidad and Tobago’s Baa1 sovereign credit rating based on relatively high income le­vels, driven by the country’s large and diversified energy sector, Finance Minister Larry Howai said in a release on Wednesday.
Howai said Moody’s also based its evaluation on the expansion of the economy which, the analysts identified, was mainly due to the performance of the non-ener­gy sector, given the significant maintenance work that had to be done in the energy sector over the past year.
This expansion, Howai said, had been driven, to a large extent, by an aggressive fiscal stimulus programme which was complemented by an accommodative monetary policy stance.
The Moody’s report stated the T&T economy was expected to maintain a positive momentum into 2014, and forecast growth of 2.9 per cent in 2014, “further picking up to 3.2 per cent in 2015, driven by increased exploration activity and foreign investment in the energy sector, as well as public infrastructure projects”.
Moody’s noted, too, “the sovereign credit profile also benefits from a moderate and affordable debt burden and a very strong external position anchored by a sizeable foreign exchange reserves buffer”.
The organisation classified Trinidad and Tobago’s strength as “very high” due to its relatively moderate debt burden and comparatively high debt affordability.  
Moody’s cited the government’s balance sheet, which includes the country’s Heritage and Stabilisation Fund, as “a core financial institution to manage oil sector revenues” that has accumulated a balance in excess of 20 per cent of gross domestic pro­duct, and was one of the factors that had contri­buted to the reaffirmation of the positive credit rating, Howai said.
The minister said the rating confirmation underlined “the success of the continuing efforts of the government to improve the quality of life for citizens, transform the economy, create new jobs and provide improved services without deteriorating the country’s fiscal metrics”.  
Regarding the downside risks identified by Moody’s, Howai said: “I am fully cognisant of the issues raised by Moody’s on the fact that the economy remains highly dependent on the energy sector and the exis­tence of infrastructure deficiencies as well as competitiveness challenges. (Express)