Trinidad and Tobago: IMF Staff Concluding Statement

The International Monetary Fund (IMF) in its latest staff concluding statement on Trinidad and Tobago noted that for the first time in a decade, the sovereign is undergoing a gradual and sustained economic recovery. Real Gross Domestic Product (GDP) rebounded in 2022 and is estimated to have further expanded by 2.1% in 2023.
This reflects the strong performance of the non-energy sector, which was partially offset by a contraction in the energy sector. Inflation also declined sharply to 0.3% in January 2024, after peaking at 8.7% in December 2022, mainly due to declining food and imported goods inflation.
In terms of fiscal discipline, the fiscal balance in FY 2023 was broadly in line with the budget. The overall fiscal deficit is estimated at 1.1% of GDP in FY2023, 0.2 percentage points better than initially budgeted. Higher non-energy revenue and lower than budgeted capital expenditure were the main contributors to the better than expected deficit.
Central government debt increased to 54.3% of GDP in FY2023 (from 50.7% of GDP in FY2022) and public debt reached 70.9% of GDP in FY2023 (from 67.0% of GDP in FY2022). On a positive note, public financial buffers remained strong with total assets in the Heritage and Stabilization Fund at US$5.5Bn (19.2% of GDP) by end-FY2023.
Going forward, economic growth is projected to gain momentum. Real GDP is expected to expand by 2.4% in 2024, supported by the non-energy sector and new energy projects coming upstream, which will help offset the structural decline in energy production.
The Fund views the FY 2024 budget envelope as appropriate to support the domestic recovery and address infrastructure needs. However, IMF staff estimates the fiscal deficit will widen to 2.7% of GDP in FY2024, reflecting lower energy revenues due to declining prices and domestic production, increased capital spending, and a higher wage bill, due to the long-standing public wage settlement with some unions.

(Source: International Monetary Fund)