Sluggish Recovery and Subdued Inflation In Trinidad & Tobago Will Delay Interest Rate Hike Until 2022

• Fitch Solutions forecasts that the Central Bank of Trinidad and Tobago (CBTT) will maintain its benchmark monetary policy rate at 3.50% through end-2021, in an effort to support an economic recovery that was hampered by a mid-year COVID-19 outbreak. 
• Fitch expects accelerating economic growth in the coming quarters will increase inflation to an average of 2.2% in 2022, from a forecasted 1.4% in 2021, which will push the CBTT to raise its policy rate to 3.75% in 2022. 
• In addition, it expects tightening by the US Federal Reserve (Fed) in 2022 will increase pressure on the CBTT to follow suit in order to stem capital outflows.

(Source: Fitch Solutions)