Energy Gains and Manufacturing Boom Lift T&T Economic Performance

  • In Trinidad & Tobago (T&T), macroeconomic stability was maintained in 2025, supported by continued strength in the energy sector and a notable expansion in non-energy activity, according to economist Dr Vaalmikki Arjoon.
  • Arjoon highlighted that the energy sector grew by 2.2% in the first three quarters of 2025, supported by increased gas production from the Cypre and Mento fields. "However, the most striking development was recorded in the non-energy manufacturing sector, which expanded by 12.0% over the same period," he said.
  • The sector has also demonstrated longer-term resilience, growing by more than 50.0% since the immediate pre-Covid period (Q3 2019), despite ongoing challenges in the private sector, including global supply chain disruptions affecting raw material imports, foreign exchange constraints, and port-related inefficiencies.
  • "The food processing industry in the manufacturing sector appears to be the strongest performer, growing by 16% in the first three quarters. Further, 2025 also points to an increase in consumer spending, with point-of-sale purchases increasing by 8.1%," he said.
  • In the first quarter of fiscal 2026 (October to December 2025), the economy recorded a modest fiscal surplus of $100 million. "Brent crude is currently hovering around US$105, while the LNG benchmarks used to calculate our gas price, like JKM, Dutch TTF and UK NBP, are all ranging between US$15 and US$20 per mmbtu.
  • Indeed, these prices are much higher than the oil and gas prices the budget was predicated on, US$73.25 per barrel and a gas price of $4.25 per mmbtu. This, therefore, strengthens energy revenues for the State, improves export earnings and foreign exchange, and widens our overall fiscal space," said Arjoon. He added that these higher prices, especially if prolonged, could also narrow the overall fiscal deficit projected for the year, or may even produce a small surplus by September 2026.
  • "It also means that some portion of the revenues is likely to have been deposited into the Heritage and Stabilisation Fund. Naturally, higher earnings from the energy sector might also cause, at the very least, the ratings outlook to improve from negative to stable, or even to positive," he said.
  • Arjoon said while the International Monetary Fund (IMF) has projected growth of 0.7% in 2026 and 2.95% in 2027, he argued that stronger-than-expected energy revenues could allow T&T to outperform these forecasts. Additionally, improved fiscal space could support higher capital expenditure without increased reliance on borrowing.

(Source: Trinidad Express)