Trinidad and Tobago’s economic system shrank within the first quarter of 2025, with each vitality and non-energy sectors posting declines, in keeping with the Central Financial institution’s September Financial Coverage Announcement.
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The Financial institution maintained its repo fee at 3.50 per cent, warning that development prospects stay fragile regardless of low inflation and steady home costs.
Citing information from the Central Statistical Workplace (CSO), the Central Financial institution reported that actual GDP contracted by 2.1 per cent year-on-year within the first quarter. Output fell 4.8 per cent within the vitality sector and 1.0 per cent within the non-energy sector, reflecting weak point throughout key industries.
Preliminary figures for the second quarter present a combined image. Pure fuel manufacturing slipped 2.1 per cent year-on-year, whereas crude oil output rose barely by 0.3 per cent. Petrochemical manufacturing was uneven, with ammonia and urea output climbing 6.9 per cent and 26.7 per cent, respectively, however methanol plunging 28.1 per cent.
Non-energy exercise remained sluggish. The Financial institution stated a slowdown within the distribution sector and tepid development and manufacturing exercise probably dampened development heading into mid-year. “Whereas inflation is prone to stay low, development prospects are fragile,” the Central Financial institution cautioned, pointing to softer labour circumstances, potential changes in authorities programmes, and uneven vitality positive factors from new pure fuel fields.
Regardless of the weak development outlook, inflation stays contained. Headline inflation stood at 1.4 per cent year-on-year in August, unchanged from three months earlier. Core inflation edged as much as 1.0 per cent, whereas meals worth will increase eased to 2.9 per cent as a consequence of falling vegetable costs. Constructing materials costs rose 2.4 per cent, and wholesale costs elevated 1.2 per cent within the second quarter.
Liquidity within the monetary system tightened to $3.9 billion in September from $4.2 billion in August, pushed by strong credit score development, authorities financing operations, and Central Financial institution international change gross sales. Personal sector credit score expanded 7.7 per cent in July, down from 9.1 per cent in April, with enterprise lending up 8.1 per cent and shopper credit score up 9.9 per cent. Actual property mortgage loans grew 6.3 per cent.
Exterior pressures additionally weigh on the outlook. Crude oil costs averaged US$64.08 per barrel in August, down from US$75.55 a 12 months earlier, whereas pure fuel benchmarks slipped amid a worldwide slowdown and geopolitical tensions. The Worldwide Financial Fund tasks world development to sluggish to three.0 per cent in 2025, from 3.3 per cent in 2024.
International financial easing, together with the U.S. Federal Reserve’s September fee lower to 4.00–4.25 per cent, has narrowed rate of interest differentials with Trinidad and Tobago, whilst native short-term treasury yields rise with tighter home liquidity.
Given these circumstances, the Financial Coverage Committee opted to maintain the repo fee unchanged. The following coverage announcement is scheduled for December 31, 2025.
