Business
Trinidad & Tobago rating stable – Moody’s Investor services
As a result, Moody’ said the Trinidad & Tobago government debt increased to 46.9 percent of Gross Domestic Product (GDP) in 2012 from 23.4 percent in 2008.
It said over half of the increase, about 13 percent of GDP, was due to domestic debt issued to settle fiscal liabilities, “stemming from the bailout of CL Financial, a systemically important financial conglomerate that collapsed in 2009”.
Moody’s said although it expects the fiscal deficit to average around 5 percent of GDP in 2013/14, compared to an average surplus of 1.3 percent in 2004-2008, “the rate of government debt accumulation should moderate in the coming years.
“The government benefits from low funding costs, a favorable debt maturity profile that limits rollover risk, and a broad non-energy revenue base,” it said.
Moody’s said Trinidad & Tobago’s credit resilience is supported by “significant buffers in the form of fiscal savings, a high level foreign exchange reserves, and low external debt ratios relative to peers”.
It said the Heritage and Stabilization Fund (HSF), a core fiscal institution created to manage excess fiscal revenues from the oil sector, has accumulated a balance equivalent to 19 percent of GDP as of 2012.
Moody’s said the country’s international reserve cushion of 42 percent of GDP is “superior to most Baa1-rated peers”.
