Trinidad and Tobago Economic Forecast

After cooling in Q1 year on year, GDP growth was likely resilient in subsequent quarters. April–September likely saw robust domestic demand growth on a falling unemployment rate, robust credit growth and cooling inflation. Growth in tourist arrivals also remained robust at over 20% year on year in April–October, which should have bolstered the services sector. Less positively, the oil and gas sector likely struggled in recent months, with oil output remaining in the red in April-August and average LNG output swinging into contraction in April–September. In other news, Trinidad reached a new licensing agreement with the U.S. in October and concluded an agreement with Venezuela in November to launch the Manatee gas project. The final investment decision should be made next year; if approved, the project would boost the energy sector and exports.

Inflation sank to 1.3% in October (September: 3.9%) on softer price growth for food. The headline rate should average below 2023 next year on a high base effect and softer domestic activity. Shocks to global commodity markets and spiking domestic food prices due to a stronger-than-expected El Niño weather pattern are upside risks.