Trinidad and Tobago: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Trinidad and Tobago

The 2026 Article IV Consultation discusses that Trinidad and Tobago’s economy has been slowly recovering toward pre-pandemic levels with low inflation. The financial system remains resilient, supported by strong capitalization, profitability, adequate liquidity, and low nonperforming loans. Although the current account continues to record a surplus, the external position has weakened, with declining international reserves despite remaining at adequate levels. Fiscal conditions have deteriorated due to lower energy revenues, higher current expenditure, and rising public debt, while the aging energy sector is expected to constrain near-term growth. Inflation is projected to rise temporarily, partly because of the Middle East conflict, before gradually easing. Higher energy prices are expected to improve export earnings and strengthen fiscal and external balances, providing an opportunity to rebuild fiscal buffers through increased public savings and contributions to the Heritage and Stabilisation Fund. Maintaining macroeconomic stability requires stronger fiscal consolidation, narrowing the interest rate differential with the United States, and gradually increasing exchange rate flexibility. Financial sector resilience should be reinforced through stronger regulation, enhanced supervision, and reduced investment fund vulnerabilities.