Every government points to its current success, real or imagined, and blames the former regime for the country’s current failures. Blaming predecessors is a universal political strategy used to deflect accountability, manage public expectations and simplify complex systemic issues. Leaders use this “blame game” to explain away unfulfilled promises and maintain a narrative of progress despite ongoing hardships.
The current IMF Article IV consultation exposes a disconnect: the real takeaways are far more nuanced and complex than the validation claimed in the Finance Minister’s press release. It is important to examine several critical facts.
The success of Trinidad and Tobago’s economy currently depends on the performance of the natural gas sector for economic growth and foreign exchange generation. Natural gas production has been falling since 2013, except for a brief respite when Angelin and Juniper projects came on stream in 2018. Since then, natural gas production has declined by an additional 27 per cent. As a result, several plants are idled or shut down.
Nutrien’s five plants remain closed as negotiations with the National Gas Company (NGC) over a long-term contract remain unresolved. Meanwhile, the NGC’s press release on May 19, announced the conclusion of a major gas sales contract with Methanol Holdings (Trinidad) Limited, an affiliate of the Proman Group. However, it did not disclose that this agreement ends on December 31. Thus, the contract provides only a short-term respite. What will happen on January 1, 2027? How is the shortfall to be reconciled with competing commercial demands?
The IMF reports that economic growth was 0.08 per cent in 2025 and is expected to remain constant in 2026. Although this could be seen as stable, it is still much less than the 2023 and 2024 growth numbers of 1.5 per cent and 2.5 per cent, respectively. Furthermore, the report projects a 4.5 per cent decline in the energy sector in 2026. This is hardly an encouraging sign.
However, the report does provide some positives. It notes that the economy continues to recover toward pre-pandemic levels, supported by resilient non-energy sector activity. Additionally, it estimates that higher global energy prices should provide “near-term” support to external and fiscal positions, creating an opportunity to rebuild policy buffers. It also comments positively on the low inflation rate and the health of the banking sector.
Furthermore, the report congratulates the authorities for successfully exiting the European Union list of non-cooperative tax jurisdictions. It also praised the “courageous” reforms to the National Insurance System, while emphasising that these were only a first step and that additional measures are needed to ensure the long-term sustainability of the public pension system.
However, the public debt and foreign exchange system again drew delicately worded criticism. The IMF report noted that persistent fiscal deficits have increased public debt and emphasised the need for stronger, sustained fiscal consolidation to put debt on a credible downward path and preserve external stability.
With reserves declining, the report reaffirmed earlier calls to improve foreign exchange market functioning and to gradually pursue greater exchange rate flexibility, supported by appropriate measures.
The IMF report also cautioned that T&T’s economic outlook is subject to heightened uncertainty due to the war in the Middle East, underscoring the delicacy of the situation and the need for key decisions.
In this context, the ongoing “negotiations” with the Public Services Association over how a previously negotiated settlement should be discharged between cash or non-cash payments is disconcerting. Undoubtedly, fiscal prudence and discipline are required.
