T&T’s Economy On the Mend – IMF Latest Stats Show

• Trinidad and Tobago’s economy appears to be slowly on the mend, according to the latest stats released by the International Monetary Fund (IMF). 
• The IMF’s country report for the twin-island republic said in 2022, its real gross domestic product (GDP) expanded by 2.5%, supported by the non-energy sector and partially offset by an unexpectedly weaker performance of its energy sector. 
• Notably, inflation in T&T reached 8.7% at the end of last year, driven by imported energy and food prices, partial liberalization of domestic fuel prices in 2022, and domestic flooding.
• These higher-than-expected energy prices, however, resulted in the overall fiscal balance registering a surplus of 0.3% of GDP in FY2022, for the first time in over a decade, and after a record deficit of 11.7% of GDP in FY2020.
• Looking ahead, the organization stated that recovery is expected to gain broad-based momentum in 2023 with a 3.2% GDP expansion. However, over the medium term, as oil and gas fields mature, potential growth will slow down to 1.5%. The IMF lauded T&T for its prudent management of the energy revenue windfall and underscored the importance to continue rebuilding buffers.
• Inflation is projected to slow down to 4.5% by the end-2023 and will continue declining with international prices, which will result in a narrower current account surplus, averaging 6.7% of GDP. Its international reserve coverage is projected to remain adequate at around 6.5 months of prospective total imports by 2028.
• The risk to the growth outlook is tilted toward the downside. Downside risks stem from potential disruptions to domestic oil and gas production; a sharper-than-expected global slowdown affecting energy markets, and global financial instabilities. On the upside, there is the potential for higher-than-expected energy production and prices, including from a new U.S. license to Trinidad and Tobago to develop a major gas field in Venezuela.

(Source: IMF)