Trinidad and Tobago: Economic Outline

Economic Indicators

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Trinidad and Tobago is heavily dependent on the production of energy and hydrocarbon exports. According to updated IMF forecasts, GDP grew by an estimated 2.5% in 2022, mainly driven by petrochemical exports and rising tourist arrivals. In 2023, growth should continue to be supported by elevated energy prices, although it may be somewhat tempered by inflation and fiscal prudence. The IMF estimates that growth should pick up to 3.2% in 2023 before slowing down to 2.3% in 2024. The country will have to put in place a big effort to diversify its economy, as existing sites saw their production level decline, while the unfavourable situation in Venezuela is impacting the refining industry.

The IMF calculated 2022 gross debt at 53.8%, with 53.9% and 54.2% forecasted for 2023 and 2024, respectively. It is mainly denominated in TTD and around four-fifths of it are held domestically. The public balance is historically negative, although it has been reducing in recent years as the rise in energy exports has increased government revenues, and it reached -0.2% in 2022. Looking ahead, the government's planned tax reforms, including the creation of a new property tax, should reduce fiscal deficit. Inflation stood at 5.8% in 2022, and should decrease to 5.6% in 2023 and to 3.4% in 2024, due to the tightening of monetary policy and extended fuel subsidies, according to the latest World Economic Outlook of the IMF. The twin island state of Trinidad and Tobago is a small but high-income country with one of the highest per capita incomes in Latin America and the Caribbean. Trinidad and Tobago has a sophisticated economy for a country of its size, embracing mineral extraction, agriculture, industry, tourism and services, but it is underpinned by a single commodity: oil. Petroleum and petrochemical industries account for about 35% of GDP while ores and mineral account for over 80% of exports. The country has also become a major financial centre in the Caribbean. Diversifying the economy remains the main challenge the country will have to face in the next years. A host of other factors, including low labour productivity, inefficient government bureaucracy and corruption have hampered economic development.

According to the last available data, the IMF estimated the country's unemployment rate around 4.5% in 2021. However, the informal sector is still developed. Social issues include an ageing population, low labour participation rate, insufficient job creation, low labour productivity, difficulties to open a business and unmanaged migration, as well as poverty (20% of the population is living below the poverty line), inequality and one of the highest crime rates in the world.

Monetary Indicators	2016	2017	2018	2019	2020
Trinidad and Tobago Dollar (TTD) - Average Annual Exchange Rate For 1 GHS	1.67	1.56	1.48	1.31	1.21

Source: World Bank - Latest available data.

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Latest Update: November 2023