INTERNATIONAL ratings agency Standard and Poors (S&P) is projecting that Trinidad and Tobago's economy will grow by 4.5 per cent and 3.9 per cent this year and in 2023 respectively.

This growth will be based on revenues from high oil, gas and petrochemical prices. S&P made this projection in its July 21 ratings report for TT.

S&P gave TT a BBB- investment grade rating in that report.

The rating was based on the view that "higher prices for oil, gas, and petrochemicals will spur an economic recovery in TT this year and strengthen economic resilience."

S&P said, "We expect the recovery will lead to strong government revenue growth and more rapid fiscal consolidation."

TT's economic outlook is defined as stable, based on S&P's view that TT will benefit from significantly higher energy and petrochemical prices which will "more than offset lower-than-expected energy production."

This, S&P continued, will lead to "stronger government revenue collection than previously anticipated, helping to stem the rise in government debt."

The firm said it could raise its rating on TT over the next two years if "stronger economic performance and favorable long-term GDP growth prospects lead to a sustained decline in government debt and ease external pressures."

But S&P also said within the next two years, it could lower its rating of TT. This, the firm said, could happen "if GDP (Gross Domestic Product) per capita fails to recover to the degree that we anticipate and the pace of fiscal consolidation is materially slower than expected."

S&P cautioned that economic policies that contribute to weakening the long-term sustainability of public finances, limit the prospects for balanced GDP growth, or materially worsen the country's external position beyond its base-case scenario could also result in a lower rating.

The firm forecast GDP per capita will surpass $20,000 by next year owing to the rise in the energy sector.

"With an economy that is heavily dependent on oil, gas, and petrochemicals, TT will benefit from favourable prices through the end of 2023."

S&P projected West Texas Intermediate (WTI) crude oil will average US$95 per barrel, Brent crude oil US$100 per barrel and, and Henry Hub natural gas US$8.25 per million Btu (/mmbtu) for the rest of 2022.

Those prices in 2021 were forecast at US$ $60 and US$55 per barrel and US$2.75 per mmbtu respectively.

S&P observed that "problems with energy production, exacerbated by mature energy fields and covid19 pandemic-related supply chain disruptions affecting maintenance and production capacity, dampened the economy during the past several years."

Against this background, the firm said, "We expect GDP per capita will reach $19,337 in 2022."

S&P said since the PNM assumed office in September 2015, it has gradually adjusted its policies to respond to the less favourable economy, prompted by the fall in commodity prices in 2014-2016, and then the pandemic and drop in prices starting in 2020.

" Nevertheless, there