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Economist, T&T Chamber: No surprises in Moody’s rating

Tuesday, May 15, 2018

Moody’s Investor Services’ latest rating for this country could have been worse since T&T is still some way off from marked economic recovery, senior economist Dr Ronald Ramkissoon said yesterday. Given the last report, it is not surprising that the rating agency has given Government a rating of BA 1 with a stable outlook, he added.

In a May 10 credit opinion, the rating agency cited “large financial buffers, high wealth levels and significant international reserves.”

It said the stable outlook is based on the expectation that capital revenue related to asset sale will help reduce borrowing requirements and lead to relatively stable debt ratios of around 64 per cent of GDP. It said stable fiscal buffers limit down downside credit risks, along with “ample access to a relatively deep domestic financial market.”

“There is nothing really surprising about that rating. It could have been worse and we ought to be grateful that it wasn’t,” Ramkissoon said.

Referring to pertinent issues in the report which must be addressed urgently, he added: “The rising debt, the foreign exchange situation—those things in particular—we need to continue to do fiscal consolidation.

‘Those concerns remain. They have not gone away and we need to move swiftly to address concerns raised in the last report and in this report if we are to talk about sustainable growth.”

CEO of the T&T Chamber of Industry and Commerce Gabriel Faria said: “We are happy the report provides us with a BA1 stable rating. However, in the report we noted with concern the items that determine the outlook and look forward to corrective action being taken to ensure we can continue to maintain the rating that has been provided by Moody’s.

“We also noted that what has driven the development has been the energy sector and reiterate the need to work collaboratively between Government and business to ensure the non-energy sector plays the required role in the transformation of the economy,” Faria said, as he sees the need for expenditure restraint in the current environment to ensure maintenance of the rating.

“While the current account deficit has narrowed it has been stated that our international reserves has declined,” he said.


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