Growth In Trinidad And Tobago To Be Driven By Private Demand, Hydrocarbons In 2023

• Fitch forecasts real GDP growth in Trinidad and Tobago (T&T) will slow to 1.9% in 2023 from an estimated 5.8% in 2022. Growth in 2023 will be driven primarily by private consumption, as well as a continued expansion of hydrocarbon exports.
• However, private consumption will grow at a slower rate than in 2022 due to a reduction in price subsidies as government fiscal consolidation efforts continue. Additionally, oil and gas prices will moderate from the highs seen in 2022 – though they will remain elevated by historic standards – while tourist arrivals growth cools, contributing to the slower growth rate.
• Higher oil and gas production will fuel continued export growth in 2023 and the years thereafter. While Fitch expects growth in the hydrocarbons sector will not return to the levels seen in 2022, due to easing oil and gas prices, it is expected that hydrocarbon production and exports will continue contributing to GDP growth moving forward.
• However, the tourism sector is not expected to drive significant services export growth in 2023, as the post-pandemic tourism rebound will likely continue to lose steam. As of September 2022, arrivals continued to lag behind other Caribbean markets, having only returned to 76.0% of September 2019 levels. Arrivals will see only minimal growth in the coming quarters as key tourism source markets, such as the US (1.8% in 2022 to 0.3% in 2023) and Canada (2.8% to 1.3%), experience slower GDP growth.
• Risks to the growth forecasts remain slightly to the downside. While Fitch expects that hydrocarbon production and exports will be a major key driver of GDP growth in 2023, there is a risk that energy prices will fall more dramatically than expected due to the global economic slowdown anticipated next year.

(Source: Fitch Solutions)