Trinidad & Tobago (T&T)’s economy will see weak economic activity growth in the coming years, as structurally lower energy prices weigh on consumption, investment and net exports.
The government will post consistent fiscal deficits, as low energy prices weigh on revenue collection. Expenditure cuts will be limited, as the government seeks to avoid politically unpopular cuts to social spending.
Lower energy prices will keep depreciatory pressure on the Trinidadian dollar (TTD) over the coming quarters, resulting in a deterioration of the country’s terms of trade and weaker investment inflows. Tight control over foreign exchange sales by the central bank will prevent a significant depreciation of the currency, although the bank will allow the unit to gradually depreciate..