S&P Global Ratings has revised Trinidad and Tobago’s economic outlook from stable to negative while affirming its investment grade rating at BBB-. The agency warned that persistent weaknesses in public finances, declining energy production and rising debt could trigger a downgrade within the next two years.
S&P said Trinidad and Tobago’s fiscal buffers have eroded over time despite repeated attempts by successive governments to diversify the economy. Energy, though shrinking, still contributes more than a quarter of government revenue and about 80 per cent of exports. With production stagnant, S&P expects growth of just one per cent in 2025 and 2026.
The agency pointed to a looming US$1 billion bond repayment in 2026 as a major pressure point, noting the country’s large sovereign wealth fund remains a cushion. The Heritage and Stabilisation Fund, together with other state assets, equals about half of GDP, limiting financing risks in the near term.
While the rating is unchanged, S&P cautioned that failure to strengthen public finances, manage debt, and broaden economic growth could lead to a downgrade. It also warned that prolonged foreign exchange shortages continue to stifle business activity and complicate diversification efforts.
Finance Minister Davendranath Tancoo welcomed the affirmation of investment grade status, calling it proof of the economy’s resilience and attractiveness to investors. But he acknowledged the negative outlook highlights the urgency of reforms. He promised the upcoming Budget would outline measures to drive diversification, boost revenues, and secure long-term growth.
