Stable External Sector Persists Amidst Significant Data Revisions

Trinidad and Tobago’s (T&T) balance of payments data reinforce Fitch’s view of near-term external stability. The country continued to post a current account surplus, supported by energy exports, which rose 11.3% y-o-y in H1 2025 while imports fell 11.0% y-o-y over the same period. This combination drove a 60.7% y-o-y surge in the goods trade balance over the first half of the year. The current account surplus also exceeded the same period in 2024, reflecting increased energy production.
The outlook is for a modest expansion in the current account from 2025 through 2027 as gas output rises and prices recover. Of note, from January through August 2025, LNG production increased by 15.1% y-o-y compared to the same period in 2024 as several gas projects came online, providing a near-term tailwind to the energy-dependent economy and external sector.
Despite persistent current account surpluses, T&T’s external outlook is clouded by large and frequent data revisions and a chronically negative ‘errors and omissions’ item in the balance of payments. Over the past decade, ‘errors and omissions’ outflows averaged roughly 6.0% of GDP, consistent with significant unrecorded capital outflows as energy companies tacitly shift funds to more attractive markets.
While officials have highlighted efforts to improve data accuracy, with the ‘errors and omissions’ item falling from 7.5% of GDP in 2023 to 1.7% in 2024 – continued inconsistencies in balance of payments reporting heighten uncertainty around the external position. Furthermore, data revisions have significantly narrowed both historical and forecasted surpluses. Most recently, the 2024 current account surplus was revised down from 4.8% of GDP to 2.5%, driven by substantial downward changes to the primary income account as energy companies repatriate profits. Similarly, BMI’s current account surplus forecasts have been lowered across the forecast horizon. A surplus of 2.3% of GDP is expected in 2025 (down from 4.7%), and 3.4% of GDP in 2026 (down from 5.0%) is now projected.
However, despite the uncertainty created by persistent errors and omissions and frequent data revisions, the sovereign’s external account poses limited near-term stability risk. The country remains a net external creditor, supported by ongoing current account surpluses. T&T’s already strong net international investment position (NIIP) rose 16.9% y-o-y in Q2 2025 to an estimated 28.5% of GDP. That improvement, however, primarily reflected a reduction in foreign liabilities, including a notable decline in foreign investment liabilities alongside an 18.0% y-o-y drop in foreign reserve assets.
While reserves have continued to fall largely due to the central bank’s defense of its de facto US dollar peg through large interventions in the domestic FX markets, the CBTT still maintains adequate buffers. Reserves covered 5.4 months of imports in October 2025 and exceeded the IMF’s Assessing Reserve Adequacy metric, underpinning the view of near-term stability. Additionally, FDI remains the majority of the NIIP’s foreign liabilities, a tailwind for stability. The NIIP, however, was also subject to significant revisions, which saw the stock of liabilities – and the overall position fall. That said, the Central Bank of Trinidad and Tobago is expected to implement tighter monetary policy through 2026, which will help to mitigate pressure over the coming year through reduced capital flight.
Risks to the outlook are heightened and skewed to the downside. Substantial and frequent data revisions and a chronically large ‘errors and omissions’ line item increase the uncertainty of the forecasts. Additionally, geopolitical tensions in the Caribbean – driven by increased US hostility toward Venezuela– pose a headwind to the country’s trade outlook, as evidenced by Venezuela’s move to cancel all contracts with Trinidad and Tobago related to joint energy ventures. Further escalation or prolonged disruptions could weigh on energy trade flows, investment, and financing conditions, amplifying downside risks to the external position over the medium and longer terms.

(Source: BMI, a Fitch Solutions Company)