Slow Growth, Higher Inflation for T&T according to IMF

  • The International Monetary Fund (IMF) has recently expressed that Trinidad and Tobago (T&T) will record modest economic growth in 2026, supported by new energy projects and continued expansion in the non-energy sector. The projection came following the IMF Executive Board’s completion of its latest Article IV consultation with the twin-island republic.
  • Economic activity continued its gradual recovery in 2025, with real GDP growth moderating to 0.8% and inflation returning to low, pre-pandemic levels. However, persistent fiscal deficits led to an increase in public debt. The current account balance remained in surplus, and while international reserves are trending downwards, they are supplemented by substantial (25% of GDP) liquid assets in the Heritage and Stabilisation Fund (HSF).
  • Looking ahead, growth is projected to remain at around 0.8% in 2026 according to the IMF, and to strengthen over the medium term, supported by new energy projects and continued momentum in the non-energy sector. Additionally, inflation is expected to rise temporarily to around 3.1% in 2026, reflecting global commodity price developments, before stabilising around 2% over the medium term.
  • The overall fiscal deficit is expected to decline to 4.6% of GDP in 2026, down from 5.5% in 2025, and international reserves are expected to remain adequate at about 5.5 months of imports. That said, higher energy prices are expected to support fiscal and external balances in the near term, while the government’s ongoing revenue and expenditure reforms, and new energy projects coming on stream, underpin a gradual improvement in the fiscal and external positions over the medium term.
  • However, the IMF noted that the outlook is subject to significant uncertainty, including due to the impact of the war in the Middle East. Delays in new energy projects or disruptions to production from mature fields could weigh on growth, while faster implementation of reforms under the Revitalisation Blueprint1 and sustained investment could lift medium-term growth prospects.

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1The "Revitalisation Blueprint" refers to a comprehensive national development and urban renewal plan launched by the government of Trinidad and Tobago. It is a strategic vision designed to reshape the economy, modernise communities, and create jobs through infrastructure, tourism, and cultural projects.

(Source: IMF)