As Energy Prices Remain Elevated, Trinidad And Tobago’s Current Account To Remain In Surplus In 2023

  • Trinidad and Tobago’s current account surplus is forecasted to remain high by historic standards at 12.0% of GDP in 2023, from an estimated 14.7% in 2022, as high energy prices drive goods exports.
  • The surplus reflects higher than anticipated energy revenues, some spending cuts relative to the budget, and the reduction of fuel subsidies.
  • Notably, higher global energy prices and prudent consolidation measures contributed to a fiscal surplus and decreased public debt in 2022.  The overall fiscal balance registered a surplus of 0.3 per cent of GDP in FY2022—for the first time in over a decade and after a record deficit of 11.7 per cent of GDP in FY2020. 
  • Overall, while softening energy prices will cause the current account surplus to moderate from the multi-year highs seen in 2022, hydrocarbon production will remain robust for 2023, supporting overall export growth and goods trade surpluses in the years ahead. Additionally, a recovering tourism industry will support a slightly narrower services deficit at 7.8% of GDP in 2023, compared to 9.8% in 2022.
  • With a large current account surplus expected for the coming year, T&T will continue to rebuild its international reserves. The country also continues to replenish its sovereign wealth fund, which was greatly depleted during the pandemic. This should allow the country to hedge against periods with lower hydrocarbon prices in the future.

(Source: Fitch Solutions & IMF)