IMF Board Concludes 2024 Article IV Consultation with Trinidad and Tobago

  • On May 8, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Trinidad and Tobago. The group noted that for the first time in a decade, Trinidad and Tobago is undergoing a gradual and sustained economic recovery.
  • Real Gross Domestic Product (GDP) is estimated to have further expanded by 2.1% in 2023, reflecting a strong performance of the non-energy sector. Further to this, economic growth is projected to gain momentum in 2024, supported by the non-energy and energy sectors.
  • Inflation has declined sharply, mainly due to decelerating global food and imported goods prices. Banks’ credit to the private sector continues to expand, and the financial sector appears sound and stable. Inflation is projected to remain low throughout 2024.
  • The current account is estimated to have remained in a surplus in 2023, and international reserve coverage is adequate at 8.3 months of prospective total imports. However, the current account surplus will narrow mainly due to a decline in energy prices and energy exports, which is estimated at 5.7% of GDP in 2024. Overall, international reserve coverage is expected to remain adequate at 7.5 months of prospective total imports.
  • On the fiscal front, the fiscal deficit in FY 2023 continued supporting the recovery and was better than budgeted, while public sector debt remained below the authorities’ soft debt target. The fiscal position is projected to remain adequate, reaching a deficit of 2.7% of GDP in FY2024. This reflects lower energy revenues, increased capital spending, and a higher wage bill due to the long-standing public wage settlement with some unions.
  • The balance of risks is tilted to the downside in the near term, but there are upside risks in the medium term. In the near term, downside risks stem from external factors affecting energy markets (e.g., an abrupt global slowdown) and domestic sources, such as disappointments in energy production (e.g., delays to new projects or unexpected disruptions to current production). In the medium term, upside risks stem from new natural gas projects and the implementation of planned structural reforms, which could boost growth.

 (Source: IMF)