Rising Inflation to Increase Likelihood of Protests and Labour Disputes In Trinidad & Tobago

• Fitch expects that weak job growth and rising inflation in Trinidad & Tobago (T&T) will increase social instability and public dissatisfaction with the ruling People’s National Movement (PNM) government. 
• The T&T economy experienced several severe COVID-19 outbreaks and a national state of emergency order between May and November 2021, which limited the economic recovery to an estimated 1.1% growth after contracting 7.4% in 2020. This has weakened job growth while the current Russian invasion of Ukraine has led to a spike in food and fuel prices. It is expected that these factors will increase friction within the ruling PNM government and the likelihood of public unrest in the coming quarters. 
• Inflation is expected to rise significantly in the coming months, averaging 5.5% in 2022, from 2.1% in 2021. The Russia-Ukraine conflict will most likely continue in H2 2022, which will prolong supply shortages and elevated commodity prices throughout the year. 
• Notably, Fitch Solutions revised down T&T’s Short-Term Political Risk Index (STPRI) score to 59.0, from 60.8 previously, as it continues to rank low among other Caribbean markets. However, stronger than expected job growth and increased government stimulus, and social spending pose upside risks to its view.

(Source: Fitch Solutions)