Moody’s upgrades Trinidad and Tobago outlook from negative to stable

Two of the major international credit rating agencies have acknowledged the government’s strategy of regaining economic momentum. In less than a month after the IMF concluded the  2026 Article consultation with Trinidad and Tobago on May 18, Moody’s Ratings upgraded the island’s credit outlook from negative to stable. Moody’s gave Ba2 sovereign credit rating to the country indicating that it is capable of meeting its debt obligations.

Major reasons why Moody’s improved the outlook include,the  improvement of external economic prospects, the proactive debt management strategy undertaken by the government, and the country’s strong saving reserves. Along with these reasons, the main development that assisted in the improved ratings is the successful international bond issuance in January that enabled a partial redemption of the US$1 billion August 2026 bond, stated the agency. This initiative taken by the government significantly improved the country’s debt maturity profile, strengthened the country’s financial footing, and reduced external risks.

Moody’s also confirmed that the country’s financial buffers, including the Heritage and Stabilisation Fund remained significant. While combined cash and equivalent reserves estimated up to approximately 32% of the GDP, with an interest-to-revenue ratio remaining comfortably below 14%, a comparatively consistent level with similar economies.

This major update was followed by International Monetary Fund’s (IMF) 2026 Article IV Consultations, which found that the country’s economy is continuing to recover. The growth is largely supported by the non-energy sector, low inflation and a stable banking system according to the IMF’s findings. The agency also stated that the federation’s public debt remains sustainable over time and the country is enjoying access to international capital markets.

Both the esteemed agencies, IMF and Moody have acknowledged recent reforms to the National Insurance System (NIS). The Ministry of Finance has declared that the recent reforms have elongated the sustainability of NIS by 12 years. Trinidad and Tobago has been removed from the European Union’s list of non-cooperative tax jurisdictions, this is viewed as a positive step by Moody's in strengthening the country’s international positioning.

Furthermore, Moody’s has estimated a significant increase in the island’s hydrocarbon production beginning in late 2027. This is expected to assist in economic development and strengthen government revenues. The improvement in the credit outlook by the agency reflects that risks faced by the country have eased and the economy is likely to stay stable over time.

The Finance Minister of Trinidad and Tobago, Davendranath Tancoo described this development as “a defining moment for our country.” He said that the recognition from both the IMF and Moody’s has sent a strong message to the citizens, investors, and international stakeholders that the country is on a path of economic stability and confidence.

The government stated that the latest recognition by the most influential international economic assessment agencies is followed by the progress made in restoring fiscal discipline, strengthening revenue administration, improving state institutions and enhancing a programme of economic reform aimed at building long-term resilience and sustainable growth.