IMF Staff Country Reports

This 2023 Article IV Consultation discusses that Trinidad and Tobago’s economic activity is recovering supported by higher global energy prices and the rebound of the non-energy sector. Real GDP is estimated to have expanded by 2.5 percent in 2022. Inflation has increased, reaching 8.7 percent by end-2022, driven by imported energy and food prices, partial liberalization of domestic fuel prices in 2022, and domestic weather-related shocks. The recovery is expected to gain broad-based momentum in 2023. Inflation is projected to slow down following international prices. The balance of risks to growth is tilted to the downside, stemming from potential disruptions to domestic oil and gas production, sharper than expected global slowdown and global financial instabilities. The upside is on higher-than-expected energy production and prices. It is advised to maintain sound and consistent policies to support the current exchange rate arrangement. The central bank should seriously consider increasing its repo policy rate to contain inflationary pressures and narrow the negative interest rate differential with the US monetary policy rate.