Trinidad and Tobago Current Account Surplus To Narrow, External Risks Contained

• Fitch Solutions expects Trinidad & Tobago’s (T&T) current account surplus to narrow from 12.0% of GDP in 2023 to 11.0% of GDP this year, largely reflecting increased import demand as the economy performs well.
• In recent years, T&T has benefitted from a notable rebound in global energy prices, linked to the emergence of supply concerns stemming from sanctions implemented on Russia (the world’s third-largest oil producer and second-largest natural gas producer) and ongoing unrest in the Middle East.
• This has acted as a windfall for T&T, given oil (20%) and natural gas (65%, including derived products such as ammonia and methanol) account for the bulk of goods exports. The run-up in prices has helped to more than offset weakness in production, following years of underinvestment.
• Risks to external stability are contained given the healthy current account position. However, restrictions on access to foreign exchange will likely continue to create issues for small businesses.

(Source: Fitch Solutions)