Trinidad and Tobago: Economic Outline
Trinidad and Tobago is heavily dependent on the production of energy and hydrocarbon exports. According to updated IMF forecasts, the country is experiencing a gradual and sustained economic recovery for the first time in a decade: GDP rebounded in 2022 and is estimated to have further expanded by 2.1% in 2023. This reflects the strong performance of the non-energy sector, which was partially offset by a contraction in the energy sector. Inflation has declined sharply to 0.3% in January 2024, after peaking at 8.7% in December 2022, mainly due to declining food and imported goods inflation. For 2024, growth is expected to expand by 2.4%, supported by the non-energy sector and new energy projects coming onstream.
Regarding public finances, in FY2023, the fiscal balance closely matched the budget projections. The overall fiscal deficit for FY2023 is estimated at 1.1% of GDP, surpassing initial budget forecasts by 0.2 percentage points. This improvement can be attributed to higher non-energy revenue and lower capital expenditure than anticipated. Central government debt rose to 54.3% of GDP in FY2023, up from 50.7% in FY2022, while public debt reached 70.9% of GDP in FY2023, compared to 67.0% in FY2022. Despite these increases, public financial reserves remained robust, with total assets in the Heritage and Stabilization Fund standing at US$5.5 billion (19.2% of GDP) by the end of FY2023. According to IMF staff estimates, the fiscal deficit is projected to expand to 2.7% of GDP in FY2024. This increase is attributed to reduced energy revenues resulting from declining prices and domestic production, heightened capital expenditure, and an elevated wage bill due to longstanding public wage settlements with certain unions. Inflation dropped significantly to 0.3% in January 2024, following its peak at 8.7% in December 2022, primarily driven by decreasing inflation rates in food and imported goods. Trinidad and Tobago has a sophisticated economy for a country of its size, embracing mineral extraction, agriculture, industry, tourism and services, but it is underpinned by a single commodity: oil. Petroleum and petrochemical industries account for about 35% of GDP while ores and minerals account for over 80% of exports. The country has also become a major financial center in the Caribbean. Diversifying the economy remains the main challenge the country will have to face in the next years. A host of other factors, including low labor productivity, inefficient government bureaucracy and corruption have hampered economic development.
According to the last available data, the IMF estimated the country's unemployment rate around 3.2% in the third quarter of 2023. However, the informal sector is still prominent. Social issues include an aging population, low labor participation rate, insufficient job creation, low labor productivity, difficulties to open a business and unmanaged migration, as well as poverty (20% of the population is living below the poverty line), inequality and one of the highest crime rates in the world. The country’s GDP per capita (PPP) was estimated at USD 27,515 in 2022 by the World Bank.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 28.02 | 28.14 | 29.24 | 29.81 | 30.58 |
| GDP (Constant Prices, Annual % Change) | 1.1 | 1.6 | 2.4 | 1.0 | 2.2 |
| GDP per Capita (USD) | 19,718 | 19,703 | 20,376 | 20,682 | 21,120 |
| General Government Gross Debt (in % of GDP) | 56.1 | 59.0 | 62.5 | 65.5 | 68.0 |
| Inflation Rate (%) | 4.6 | 1.3 | 1.9 | 1.9 | 1.9 |
| Current Account (billions USD) | 3.40 | 1.56 | 2.12 | 1.96 | 1.80 |
| Current Account (in % of GDP) | 12.1 | 5.5 | 7.2 | 6.6 | 5.9 |
Source: IMF – World Economic Outlook Database - October 2021.
Note: (e) Estimated Data
| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Trinidad and Tobago Dollar (TTD) - Average Annual Exchange Rate For 1 GBP | 9.00 | 8.73 | 9.03 | 8.50 | 8.66 |
Source: World Bank - Latest available data.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 2.9 | 26.9 | 70.1 |
| Value Added (in % of GDP) | 1.1 | 48.9 | 47.8 |
| Value Added (Annual % Change) | -11.5 | 3.2 | 5.0 |
Source: World Bank - Latest available data.
| 2018 | 2019 | 2020 | |
|---|---|---|---|
| Labour Force | 669,487 | 668,956 | 636,888 |
Source: International Labour Organization, ILOSTAT database
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Total activity rate | 68.85% | 68.73% | 68.59% |
| Men activity rate | 79.53% | 79.42% | 79.26% |
| Women activity rate | 58.28% | 58.15% | 58.04% |
Source: International Labour Organization, ILOSTAT database
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
See the country risk analysis provided by Coface.
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: May 2024
