Trinidad and Tobago Economic Forecast

Newly released data showed that GDP grew 3.0% year on year in Q1 2023 (Q4: +3.6% yoy). A struggling energy sector, slowing manufacturing output growth and declining agricultural activity drove the moderation. Meanwhile, stronger improvement in mining and quarrying prevented a steeper deceleration. Q2 likely saw continued economic growth. Tourist arrivals rose nearly 30% year on year in April–June. Moreover, average quarterly inflation also cooled to a one-year low in Q2, and private-sector credit strengthened through June, supporting domestic demand. However, falling oil, liquified natural gas and fertilizer output in Q2 likely stalled momentum. In other news, negotiations with Venezuela on the exploitation of a gas field in its maritime territory reportedly stalled in July. Failure to reach a deal would likely cap growth prospects for Trinidad and Tobago’s energy sector in the medium term.

In June, inflation ticked up to 5.8% (May: 5.7%). This year, the headline rate should average below last year’s on a base effect, higher projected interest rates and lower external price pressures. Stronger-than-expected economic activity and El Niño hitting food supply pose upside risks.