Trinidad and Tobago Economic Outlook
After slowing in Q3 2022, the economy likely continued to lose steam in Q4. LNG production growth cooled, while the highest inflation rate since 2015 and softer credit growth point to slowing activity in the private sector. That said, a lower unemployment rate will have supported household budgets. At the start of 2023, GDP growth likely continued to cool. Year-on-year growth in LNG production eased further in Q1 from the previous quarter. More positively, new vehicle sales rebounded in January–March from Q4’s slump, pointing to robust private spending. In addition, a 137% yoy increase in tourist arrivals in the first three months of the year should have aided activity. On 1 May, the IMF concluded an Article IV consultation, lauding the country’s economic recovery and fiscal prudence. However, it noted that the pension system and global energy transition posed risks.
Trinidad and Tobago Inflation
According to the latest available data, inflation softened to 8.3% in January (December: 8.7%), while the Central Bank kept the repo rate at 3.50% in March. Our panel sees inflation cooling from current levels in 2023 on a high base effect, lower commodity prices and the policy rate rising by year end. Shocks to food prices pose an upside risk.