Despite predicting a strong rebound for the TT economy next year of 5.9 per cent, Moody's rating agency downgraded the country's credit profile due to the Government's high spending to cope with the covid19 pandemic which had worsened the GDP-to-debt ratio to almost 90 per cent.
The agency also strongly warned such growth could be jeopardised by a lack of diversification away from oil and gas which were grounded in mature fields and by a local need to partially transition to renewables.
Moody's had said government borrowing to handle the pandemic had slightly weakened Trinidad and Tobago’s credit profile from Ba1 ("speculative elements") to Ba2 ("speculative"), where Ba is midway down a nine-tier scale from Aaa to C, with each tier split into sub-tiers of one (best) to three (worst).
However economist Dr Marlene Attz made a more restrained forecast for both the highs and lows predicted by Moody's, namely growth and risks respectively.
She recently told Business Day the downgrade of TT's creditworthiness was "not significant."
Conversely she viewed as "optimistic" Moody's prediction of 5.9 per cent growth despite it echoing the IMF's prediction of 5.7 per cent.
Attz said Moody's had reinforced, not opposed, a recent IMF report on the Government's handling of the pandemic.
She said TT had faced a "perfect storm" of reduced revenues due to low energy prices and the pandemic's economic fallout.
"Covid19 has really exacerbated what was a previously bad situation."
She said heavy borrowing and withdrawals from the Heritage and Stabilisation Fund during the pandemic had worsened the debt-to-GDP ratio, even as citizens were also partly protected by Central Bank monetary initiatives such as relaxing moratoria.
Attz looked ahead. "The IMF says we will probably have some decent growth, strong economic recovery, but amid a high level of uncertainty.
"Why? Because we're not vaccinated, we're still heavily dependent on the energy sector, and still have a high debt-to-GDP ratio.
"The Government has been trying its best but there are several things that need to be done simultaneously."
Business Day asked about Moody's and the IMF predicting 5.9 and 5.7 per cent growth.
Attz said, "These are what we call in economics 'dependent on all other things being equal' – assuming you get your vaccinations under control, assuming you can reopen your economy, assuming (good) energy prices and your production levels go up.
"I'd be cautious on that (5.9 per cent), as it depends on the extent to which the economy is able to return to a level of 'normalcy', which itself depends on managing covid19."
She admitted to some worry over TT's high debt, incurred to buy vaccines and fund the Government's pandemic social programmes.
While TT has not defaulted on its debt, she expected to see another draw-down on the Heritage and Stabilisation Fund.
"We're probably going to incur more debt to pay the debt and those things
