PORT OF SPAIN, Trinidad, CMC – The Central Financial institution of Trinidad and Tobago (CBTT) says the pattern of sluggish non-energy sector exercise could have continued through the second quarter of 2025.
Indicators monitored by the Central Financial institution recommend that the continued optimistic efficiency of the distribution sector, albeit at a slower tempo, could have been countered by tepid exercise within the building and manufacturing sectors,” the CBTT stated in its Financial Coverage Announcement for September.
The CBTT said that, in accordance with knowledge from the Central Statistical Workplace (CSO), actual gross home product (GDP) contracted by 2.1 p.c year-on-year through the first quarter of 2025, with output declines of 4.8 p.c within the power sector and 1 p.c within the non-energy sector, respectively.
It stated preliminary knowledge from the Ministry of Power and Power Industries suggests blended performances heading into the second quarter.
In April this 12 months, the manufacturing of pure gasoline fell by 2.1 per cent year-on-year, whereas crude oil manufacturing registered a slight improve of 0.3 per cent. The petrochemical business skilled expansions in ammonia (6.9 p.c) and urea (26.7 p.c), however there was a notable decline in methanol output (-28.1 p.c).
The CBTT stated that home value pressures stay comparatively contained. Headline inflation, as measured by the CSO’s Client Value Index, stood at 1.4 per cent year-on-year in August this 12 months, unchanged from the speed three months earlier.
It said that core inflation, which excludes meals costs, rose marginally to 1 p.c, whereas meals value will increase, influenced by a decline in vegetable costs, decelerated to 2.9 p.c. Constructing materials costs and wholesale costs rose by 2.4 per cent and 1.2 per cent year-on-year, respectively, within the second quarter of 2025.
The central financial institution said that monetary circumstances had been broadly favorable, however market liquidity remained considerably unstable.
It stated business banks’ extra reserves on the Central Financial institution averaged TT$4.2 billion (One TT greenback=US$).16 cents) In August 2025, the determine slipped to TT$3.9 billion by the tip of the primary half of September 2025.
Authorities financing operations have impacted liquidity circumstances, strong credit score progress, and, not directly, central financial institution gross sales of overseas trade to authorised sellers. The CBTT stated tighter liquidity appeared to have an effect on the tempo of credit score growth. General, personal sector credit score within the monetary sector rose by 7.7 p.c year-on-year in July 2025, down from the 9.1 p.c progress in April 2025.
Enterprise credit score expanded by 8.1 p.c, pushed by loans to the distribution, finance, and manufacturing sectors. Client lending grew by 9.9 per cent, however there was a slowdown in loans for motor automobiles and bridging finance. Actual property mortgage loans elevated by 6.3 per cent.
The CBTT said that the Financial Coverage Committee (MPC) has famous that international financial uncertainty seems extra acute, notably with rising geopolitical tensions within the territorial areas adjoining to Trinidad and Tobago.
“Whereas inflation is more likely to stay low within the near-term, progress prospects appear tentative. The anticipated increase to power manufacturing within the second quarter of 2025 from two new pure gasoline fields could also be countered by lacklustre non-energy sector exercise. Credit score progress could proceed to average, and labour market circumstances could loosen, each of that are more likely to be impacted by the restructuring of presidency employment applications.
“These elements level to some moderation in mixture demand. On the exterior accounts, pressures could average as tariff uncertainty eases with the implementation of additional commerce agreements. Additional, short-term rate of interest differentials are doubtless to enhance ought to softer labour circumstances persist within the US, forcing the US Fed to decrease its financial coverage charge and at a sooner tempo.”
The CBTT said that, taking all these elements under consideration, the MPC agreed to take care of the repo charge at 3.50 p.c.
