Moody's Outlook Revision
Moody’s Investors Service upgraded Trinidad & Tobago’s sovereign outlook from negative to stable on 13 June 2026, while affirming the Ba2 long‑term rating for both local‑currency and foreign‑currency issuer and senior unsecured obligations.
Drivers of the Outlook Change
The revision reflects higher projected oil and gas prices, which are expected to boost export receipts and support the de facto peg to the US dollar, thereby reducing the need for foreign‑exchange reserve sales. Additionally, a Eurobond issuance in January 2026 of $1 billion enabled the partial redemption of approximately $600 million of the bond maturing in August 2026, smoothing the external repayment profile.
External Buffers and Projections
Moody’s forecasts that foreign‑exchange reserves will remain between $3.5 billion and $4 billion, a range deemed sufficient to cover external debt service and import requirements despite persistent structural balance‑of‑payments pressures that are expected to continue until new gas projects become operational toward the end of 2027.
Structural Constraints and Mitigating Factors
The agency notes a secular decline in hydrocarbon output, which limits trend growth, revenue capacity, and external accounts. These constraints are partially offset by high income levels, political stability, and moderate policy‑adjustment capacity. Fiscal risks arising from a high debt burden are mitigated by sizable buffers, notably the Heritage Fund and Stabilization Fund, which provide a fiscal financing backstop.
Production Outlook
Moody’s anticipates a meaningful boost to oil and gas production from late 2027 after final investment decisions on several large upstream projects. Natural‑gas output is projected to rise to approximately 3.0–3.5 billion cubic feet per day (bcfd) from the current 2.5 bcfd as new fields such as Manatee, Ginger, and Aphrodite come on‑stream.
Fiscal Metrics
The adjusted general‑government debt‑to‑GDP ratio is expected to peak at about 85 % in fiscal 2026 and then decline as the new gas projects generate additional revenues.
Rating Ceilings
Local‑currency and foreign‑currency country ceilings remain unchanged at Baa2 and Ba1, respectively. The three‑notch gap between the local‑currency ceiling (Baa2) and the sovereign rating reflects the economy’s significant exposure to the hydrocarbon sector, balanced by moderate exposure to domestic and geopolitical risks.