Rising Import Costs In T&T Outpace Export Earnings

• Trinidad and Tobago is expected to run a balance of payments (BOP) deficit in 2025, as money flowing out of the country due to rising import costs and overseas investments outpaces earnings from exports, according to the Central Bank. Consequently, its overall BOP is anticipated to record a deficit in 2025.
• This performance will stem from a surplus on the current account, owing to a healthy goods balance, coupled with a net outflow on the financial account, driven by increased portfolio and other investments. The varying tariffs implemented by the US can also add upward pressure to import prices.
• Over the fourth quarter of 2024, the goods balance decreased by 37.5% (year-on-year) to US$0.42Mn, when compared to the similar quarter of 2023. Despite a minor improvement in exports, it was insufficient to offset the growth in imports. Total export earnings increased by 3.5% to US$2.43Bn in the fourth quarter of 2024.
• The slightly higher outturn stemmed from an improvement in non-energy exports, which expanded by US$0.12Bn or 30.4% (year-on-year) to US$0.50Bn. However, this positive performance was partially offset by a slight decline in energy exports, which fell by 1.7% year-on-year to US$1.93Bn in the fourth quarter of 2024, compared to the same period in 2023. The reduction in energy exports was attributable to a sizeable 35.4% decline in the gas sub-category on account of lower international gas prices and export volumes.
• The country’s total imports increased by US$0.33Bn to US$2.01Bn during the fourth quarter of 2024 as non-fuel imports picked up by US$0.22Bn or 16% (year-on-year) to US$1.60Bn. Notably, this outturn was driven by an increase in imports of manufactured goods and capital imports.

(Source: Trinidad Express)