Trinidad and Tobago’s (T&T) risks weighted to the downside

• Fitch Solutions expect Trinidad & Tobago's (T&T) economy will continue its modest recovery over the coming quarters, supported by rising natural gas production. However, non-energy sector growth will remain tepid, restricted by an overvalued exchange rate and private firms' poor access to credit.

 

• The external accounts will remain weak over the coming quarters; as a real interest rate disadvantage vis-a-vis the US drives capital outflows. As a result, the pegged exchange rate will remain under pressure.

 

• Risks are weighted to the downside, as the island remains exposed to potential storms and risks to tourism access. The fiscal deficit will most likely narrow in light of rebounding energy sector revenues. However, public financing needs will continue to strain the domestic financial system.

 

• Moreover, flooding across Trinidad & Tobago (T&T) will complicate the government's efforts to contain expenditure growth in its 2019 budget. Relief efforts and public pressure stemming from the flooding will raise downside risks to our fiscal forecasts

 

 

(Source: Fitch Solutions: Country Risk Report)