S&P Global Ratings has warned that Trinidad and Tobago’s economy will remain constrained by stagnant oil and gas production and limited success in diversification, even as it affirmed the country’s “BBB- sovereign credit rating” on September 25.
A BBB- sovereign credit rating is the lowest level of investment grade, meaning Trinidad and Tobago is still seen as able to meet its debt obligations, but only just above “speculative or junk” status. Falling below that threshold would make borrowing more expensive and could limit access to international financing.
“The negative outlook reflects our view that there is at least a one-in-three chance we could lower the ratings over the next 6-24 months,” S&P said, pointing to “long-term economic growth that has been low” and buffers that “have been gradually weakening over time”.
Trinidad to overhaul energy project approvals in bid to boost oil & gas sector | OilNOW
Hydrocarbons have long been the backbone of Trinidad and Tobago’s economy, accounting for about one-quarter of GDP, nearly 80% of exports, and more than one-quarter of government revenues over the past five years. But production has been falling in recent years. S&P expects GDP growth of just 1% in 2025 and 2026, with per capita income forecast at around US$19,200.
The agency noted that “dwindling oil and gas reserves and the global energy transition away from oil will weigh on the country’s economy, emphasizing the importance of economic diversification.”
The warning comes at a time when Trinidad and Tobago, one of the Caribbean’s most established oil and gas producers, is facing mounting pressure to find new resources offshore. The government’s attempts to tap Venezuelan reserves were recently derailed by sanctions, while new supply expected after 2027 will mostly replace falling output from aging fields.
There are also signs of hope. ExxonMobil was recently awarded Trinidad’s first ultradeepwater block, TTUD-1, east of the country and north of Guyana’s Stabroek Block. If successful, such discoveries could open a new chapter for Trinidad’s energy industry.
Still, S&P cautioned that fiscal risks remain significant. The agency projects a government deficit of 6% of GDP in 2025, and warned that foreign exchange shortages and limited monetary flexibility “complicate the country’s efforts at economic diversification”.
Trinidad and Tobago’s Heritage and Stabilisation Fund, built during past booms, remains a critical buffer, with assets expected to average more than 20% of GDP through 2027, S&P said. However, even with those savings, the country will need to balance its immediate spending needs with the challenge of adapting its mature energy sector to a changing global market.
