Trinidad and Tobago: Selected Issues

IMF Staff Country Reports, June 5, 2024

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Trinidad and Tobago: Selected Issues

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Bibliographic details

• Published: June 5, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400277238.002

Overview and Purpose

• This Selected Issues paper aims to provide an overview of potential benefits of adopting a formal fiscal rule for Trinidad and Tobago, along with an overview of the international experience with anchoring fiscal policy in natural resource-rich countries.
• The authorities have aimed to manage the swings in energy prices with its Sovereign Wealth Fund.
• The eventual depletion of oil and gas reserves and lower global demand for fossil fuel due to the transition to a low-carbon environment require accumulating adequate savings for future generations.

Key Findings

• A rules-based fiscal framework consists of several main elements that guide the management of a country's fiscal policy.
• A strong institutional framework for fiscal policy is key to successfully implement a rule-based fiscal framework.
• Trinidad and Tobago could gain from further deepening reforms underway to strengthen its fiscal framework before considering the adoption of a fiscal rule.
• The effectiveness of fiscal rules would hinge on several factors, including:
  • strong fiscal institutions,
  • active and sound macroeconomic forecasting and analysis,
  • strong and sustained political commitment to a medium-term fiscal goal.

Policy Implications and Recommendations

• Consider adopting a well-designed fiscal rule to help address the challenges posed by resource depletion and the low-carbon transition.
• Deepen ongoing reforms to strengthen the fiscal framework prior to formal adoption of a fiscal rule to improve implementation prospects.
• Strengthen institutional capacity for:
  • macroeconomic forecasting and analysis,
  • transparent management of Sovereign Wealth Fund resources,
  • sustained political commitment to medium-term fiscal objectives.

Thematic Areas Covered

• Economic sectors
• Environment
• Fiscal policy
• Fiscal rules
• Greenhouse gas emissions
• International organization
• Monetary policy
• Natural gas sector
• Renewable energy

Keywords Highlighted

• B. Trinidad and Tobago's exposure
• C. policy implication
• Caribbean
• digitalization strategy
• emissions intensity of Trinidad and Tobago
• EU Market
• Fiscal rules
• Global
• Greenhouse gas emissions
• Natural gas sector
• Renewable energy

Content in this bundle

• Trinidad and Tobago: Selected Issues; IMF Country Report No. 24/151; April 22, 2024
  • Trinidad and Tobago: Selected Issues; IMF Country Report No. 24/151; April 22, 2024 (Markdown version)
  • Trinidad and Tobago: Selected Issues; IMF Country Report No. 24/151; April 22, 2024 (PDF)