T&T Hydrocarbon Production, Exports Set to Expand

  • After seeing above-trend gross domestic product (GDP) growth in 2024, Trinidad and Tobago (T&T) saw volatile GDP prints at the start of 2025. Real GDP contracted 2.1% year over year (YoY) in the first quarter of 2025 (Q1 2025), its weakest since Q1 2021, amid declines in both energy (4.8% YoY) and non‑energy (‑0% YoY) sectors against a soft external backdrop.
  • However, the economy rebounded in Q2, expanding 2.6% YoY, driven by increases in both natural gas (11.7% YoY) and LNG (27.8% YoY) output, alongside gains in petrochemicals. Mining, agriculture, construction and manufacturing were also points of strength.
  • Trade and repairs, the largest component of the national accounts, posted a second consecutive contraction, though the pace of this contraction eased versus Q1, a positive sign for H2 2025. Momentum is seen extending into the second half of 2025 (H2 2025), with Liquefied Natural Gas (LNG) output up 24.6% YoY in Q3, growth in wholesale and retail transactions and a stabilising job market. BMI analysts expect the economy to continue expanding at a steady, albeit muted, pace through end‑2025, currently estimated at 0.9% annually.
  • Looking ahead to 2026 and 2027, the real economy is forecasted to grow 1.4% in 2026 and 2.6% in 2027. Growth will be driven by expanded production and export of hydrocarbons, with natural gas and LNG output rising alongside steady household demand supported by low inflation, a recent public‑sector minimum wage increase, and a stabilising labour market. Of note, the unemployment rate fell to 3.8% in Q2 alongside an increase in the labour force, supporting the non‑energy economy.
  • BMI’s Oil & Gas team is optimistic on natural gas production and export, projecting production growth of 3.0% in 2026 and 10.0% in 2027. This outlook reflects several new gas projects slated to come online, though updated timelines have pushed some start dates back by a year. As a result, BMI revised 2026 GDP growth down to 1.4% from 2.7% while nudging 2027 up to 2.6% from 2.4%.
  • Furthermore, consistent declines in local cement and commercial vehicle sales in 2025 point to continued investment weakness in 2026, alongside a slowdown in business credit growth and notable contractions in the import of capital goods in Q1 (-32.9% YoY) and Q2 (-4.0% YoY), respectively. These trends are expected to continue in 2026, given the view of increased interest rates and continued uncertainty from crime and regional tensions.

(Source: BMI, A Fitch Solutions Company)