Economy & Business - December 2021

TRINIDAD & TOBAGO: Moody’s take a negative view despite IMF support

Trinidad & Tobago’s finance minister, Colm Imbert, has sought to justify the country’s policies despite the 23 November downgrade by international credit ratings agency Moody’s from Ba1 to Ba2. In response to the downgrade, he said: “This decision by Moody’s collides with the policy advice we have received from all international organisations to protect our country and support the recovery in the current circumstances…[The use of fiscal policy] helped avoid destruction of the economic and social fabric and was both sensible and sensitive in our view.” The problem for Imbert, however, is that there is not necessarily any incompatibility between Moody’s assessment of increasing risk and the fact that his policies have generally been in line with the advice of “all international organisations”, by which he primarily means the International Monetary Fund (IMF). The fact that the IMF and others believe that Trinidad has been doing what it must do to protect the country’s economic and social fabric in the face of the coronavirus (Covid-19) pandemic is not incompatible with the conclusion that these policies involve increased risk for the country’s creditors.

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