Lead
S&P Global Ratings has reaffirmed Trinidad and Tobago's long-term sovereign credit rating at 'BBB-' and retained a negative outlook, underscoring the agency's concern about the country's fiscal profile despite an uptick in energy prices and newly implemented tax measures.
Outlook and downgrade probability
The ratings agency said the negative outlook implies at least a one-in-three chance of a downgrade over the next 12 months if authorities do not take timely action to strengthen public finances and preserve the country's external profile. S&P pointed to the government's own midyear update, which showed the fiscal deficit exceeded 3% of GDP despite the support from higher energy revenues and new taxes.
Growth and per capita income
S&P noted that GDP per capita remains below its 2014 level after 12 years of weak growth. Looking ahead, the agency expects domestic energy production to drive a recovery in 2027. Its projections foresee GDP per capita rising to almost $19,000 by year-end, with the economy shrinking in 2026 before expansion resumes when new gas fields begin production in 2027.
Fiscal buffers and withdrawals
The agency observed that the government has made significant use of the Heritage and Stabilization Fund, withdrawing $250 million in fiscal 2026 year to date, after total withdrawals of $410.8 million in fiscal 2025. S&P expects the general government deficit to narrow to 4.4% of GDP in fiscal 2026, down from 6.2% in 2025.
External position and exports
S&P forecast a current account surplus averaging about 5.2% of GDP from 2026 through 2029, attributing the projected surplus to energy exports. The ratings agency noted that energy exports account for roughly 80% of the country's total exports, which underpins the anticipated external surplus over that period.
Other rating assessments
The agency maintained its transfer and convertibility assessment at 'BBB' and left the short-term foreign and local currency sovereign credit ratings unchanged at 'A-3'.
Analytical perspective
By holding the sovereign rating steady while keeping a negative outlook, S&P has signaled that current fiscal and external trends are not yet sufficient to improve the rating but that further deterioration could prompt a downgrade. The assessment places emphasis on the interplay between energy-driven external strength and persistent fiscal pressures, including reliance on withdrawals from the stabilization fund and a still-elevated general government deficit.
Note: The article presents S&P Global Ratings' findings and projections as reported by the agency. The figures and forecasts above reflect S&P's published assessments.