Trinidad and Tobago Set For Consecutive Growth Slowdowns In 2023 And 2024

• Fitch Solutions forecasts consecutive decelerations in Trinidad and Tobago’s real GDP growth rate in 2023 and 2024 to 2.3% and 1.8% respectively, from 2.6% in 2022.
• The latest national accounts release shows that real GDP growth came in at 1.3% y-o-y in Q123. While this was a slight improvement from the Q422 rate of -0.9%, Fitch believes that economic growth will deteriorate towards the latter half of 2023 and the first half of 2024 thanks to slow export growth, somewhat tight fiscal policy and an elevated unemployment rate.
• Furthermore, Fitch’s somewhat pessimistic forecast is largely underpinned by poor export growth due to slowing hydrocarbon production growth as well as a bleak US growth outlook.
• Despite falling inflation, private consumption growth will also decelerate given elevated unemployment and limited support from the government.
• The US macro outlook remains the key risk to Fitch’s near-term growth forecasts. There exist rising upside risks of a ‘soft landing’ in the US, in which the economy manages to avoid a recession. These risks have grown in the last few months given strong real wage growth, loose fiscal policy and improving financial conditions. Should this materialise, Fitch would look to raise its growth forecasts for T&T, especially that of 2024.

(Source: Fitch Solutions)