Trinidad and Tobago: Economic Outline
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Trinidad and Tobago is heavily dependent on the production of energy and was badly affected by the drop of hydrocarbon prices in recent years: the country went through four years of recession. With the economy already suffering, the country was was deeply impacted by the COVID-19 crisis. According to updated IMF forecasts, GDP growth fell by an estimated -1% in 2021. However, growth should pick up to 5.4% in 2022 and 2.1% in 2023. The country will have to put in place a big effort to diversify its economy, as existing sites saw their production level decline, while the unfavourable situation in Venezuela is impacting the refining industry. Household consumption is expected to contribute positively to growth, also thank to a rise in the minimum wage.
The IMF calculated 2021 gross debt at 70.4%, with 72.5% and 74.6% forecasted for 2022 and 2023, respectively. It is mainly denominated in TTD and around four-fifths of it are held domestically. The public balance is historically negative, although it has been reducing in recent years. Estimated at -7% in 2021, it is expected to decrease to -6% in 2022 amid an increase in the minimum wage and extensive subsidies to households and local health authorities. Inflation stood at 1% in 2021, and should decrease to 0% in 2022 before increasing to 1.4% in 2023, according to the latest World Economic Outlook of the IMF. The twin island state of Trinidad and Tobago is a small but high-income country with one of the highest per capita incomes in Latin America and the Caribbean. 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 mineral account for over 80% of exports. The country has also become a major financial centre 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 labour productivity, inefficient government bureaucracy and corruption have hampered economic development. In 2021, the government continued implementing a series of fiscal measures to mitigate the impact of COVID-19, which included VAT and income tax refunds to individuals and SMEs, liquidity support to individuals and small businesses via credit union loans at reduced interest rates and long repayment periods, grants to hoteliers to upgrade of their facilities; food, rental and income support for low-income vulnerable groups, import duty and VAT waivers on imports of certain medical and emergency supplies, and additional funding for the Ministry of Health to deal with COVID-19. Additionally, the Central Bank reduced the policy rate by 150 bps to 3.5%, and the reserve requirement on commercial bank deposits by 300 bps to 14%. Overall, although the pandemic has significantly impacted the Trinidadian economy, the country has begun to recover.
According to the last available data, the IMF estimated the country's unemployment rate around 2.8% in 2020, and it is expected to remain stable in the next two years, despite the negative economic impact of the COVID-19 pandemic. However, the informal sector is still developed. Social issues include an ageing population, low labour participation rate, insufficient job creation, low labour 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.
| Main Indicators | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| GDP (billions USD) | 21.39 | 23.99 | 29.34 | 29.34 | 29.62 |
| GDP (Constant Prices, Annual % Change) | -7.4 | -0.7 | 4.0 | 3.5 | 3.5 |
| GDP per Capita (USD) | 15,286 | 17,056 | 20,746 | 20,642 | 20,739 |
| General Government Gross Debt (in % of GDP) | 59.3 | 60.6 | 54.7 | 54.4 | 56.1 |
| Inflation Rate (%) | 0.6 | 1.5 | 5.0 | 4.6 | 3.2 |
| Current Account (billions USD) | -1.36 | 2.51 | 4.21 | 4.66 | 4.66 |
| Current Account (in % of GDP) | -6.3 | 10.4 | 14.3 | 15.9 | 15.7 |
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) | 3.0 | 26.6 | 70.3 |
| Value Added (in % of GDP) | 1.0 | 42.2 | 54.0 |
| Value Added (Annual % Change) | -16.5 | -1.0 | -2.0 |
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.).
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Latest Update: February 2023
