Economist says Moody’s outlook change should be seen as a warning

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    Photo credit: 103FM

    The change in T&T’s credit rating outlook by Moody’s to negative, should be seen as a warning to get the country’s financial act in order according to an economist.

    The Finance Ministry today issued a statement saying that T&T’s rating remained unchanged at Ba1, which it says is testimony to the resilience of the country, in the face of shocks brought on by COVID-19.

    However, 103.1FM News spoke with Economist Dr Vaalmiki Arjoon who says the outlook tends to provide an indication of what will happen with your rating in the next year, though it’s not cast in stone.

    He says, “So if you have a positive rating, that means they’re anticipating they’re going to upgrade you. If it’s stable, they anticipate that the rating is not going to change and as you’ve rightly seen, the rating has not changed. But if it’s negative, it means that they’re anticipating that in the next rating exercise the credit rating is going to be one of a downgrade. So this means that Moody’s anticipates that in the next year they are going to downgrade us. So one could look at it as a warning.”

    He believes if T&T cannot show there’s a viable plan in place to generate revenue in the short term it will be downgraded.

    Dr Arjoon thinks Government should look to the international market to borrow funds as its now cheaper to get loans at this time.

    He says the state should avoid, at all costs, tapping into the Heritage and Stabilization Fund to service external debt.