GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

T&T’s eco­nom­ic out­look is show­ing ten­ta­tive signs of sta­bil­i­ty, but an­a­lysts and the busi­ness com­mu­ni­ty warn that the coun­try re­mains caught be­tween short-term gains from favourable ex­ter­nal con­di­tions and deep-root­ed struc­tur­al weak­ness­es that con­tin­ue to lim­it sus­tain­able growth.

While high­er glob­al en­er­gy prices are ex­pect­ed to pro­vide a tem­po­rary boost to rev­enues and sup­port fis­cal bal­ances, the un­der­ly­ing re­al­i­ty is that out­put con­straints, per­sis­tent fis­cal pres­sures and slow di­ver­si­fi­ca­tion ef­forts con­tin­ue to shape the econ­o­my’s tra­jec­to­ry.

Against this mixed back­drop of cau­tious op­ti­mism and on­go­ing vul­ner­a­bil­i­ty, econ­o­mists Mar­i­ano Browne and In­dera Sage­wan say the coun­try’s mod­est growth prospects re­flect sta­bil­i­ty rather than trans­for­ma­tion.

Their com­ments come as the In­ter­na­tion­al Mon­e­tary Fund (IMF) pro­ject­ed that T&T’s econ­o­my will grow by 0.8 per cent in 2026, with in­fla­tion ris­ing tem­porar­i­ly to about 3.1 per cent due to glob­al com­mod­i­ty price pres­sures.

The fund al­so ex­pects the fis­cal deficit to nar­row to 4.6 per cent of GDP from 5.5 per cent in 2025, while re­serves are pro­ject­ed to re­main ad­e­quate at around 5.5 months of im­port cov­er.

Browne said the lat­est out­look “is not go­ing to be any dif­fer­ent from the last as­sess­ment,” point­ing to per­sis­tent is­sues sur­round­ing for­eign ex­change short­ages, the struc­ture of the econ­o­my and high gov­ern­ment spend­ing.

He warned that al­though the fis­cal deficit is ex­pect­ed to de­cline, “it’s still go­ing to be high­er than the pro­ject­ed amount, which means that the ex­pen­di­ture pro­file is still high.”

Browne added that the coun­try re­mains con­strained by low gas out­put, not­ing that while high­er en­er­gy prices may pro­vide some ben­e­fit, “you’re sell­ing the same amount or less prod­uct, but you’ll get a big­ger amount for it,” a sit­u­a­tion, he said, that can­not sus­tain long-term growth.

Sage­wan al­so cau­tioned against in­ter­pret­ing the pro­ject­ed im­prove­ment as a sign of re­al progress, stat­ing that the ex­pect­ed growth “has to do with the fact that we are go­ing to en­joy in­creased rev­enues as a con­se­quence of the high­er prices of oil and petro­chem­i­cals.”

She stressed that this is “a short-term blip” dri­ven by glob­al con­di­tions rather than do­mes­tic out­put, warn­ing pol­i­cy­mak­ers to be care­ful in how such rev­enues are man­aged.

While the IMF flagged con­cerns about re­serves, Sage­wan pushed back, say­ing “our in­ter­na­tion­al re­serves have been hold­ing quite stur­dy,” with im­port cov­er re­main­ing about six months.

She ac­knowl­edged con­cerns about ris­ing pub­lic debt, but not­ed that the in­crease has been mar­gin­al, adding that the Gov­ern­ment in­her­it­ed a high debt bur­den and has opt­ed to main­tain ex­pen­di­ture to avoid deep­er eco­nom­ic fall­out.

Ki­ran Singh, pres­i­dent of the Greater San Fer­nan­do Cham­ber of Com­merce fur­ther high­light­ed that the pro­ject­ed re­duc­tion in the fis­cal deficit com­pared to last year sup­ports ex­pec­ta­tions of con­tin­ued, al­beit mod­est, growth. How­ev­er, Singh al­so un­der­scored the need to use any en­er­gy wind­falls to dri­ve di­ver­si­fi­ca­tion, stat­ing that “we are still an en­er­gy-based econ­o­my” and must pri­ori­tise ex­pan­sion in non-en­er­gy sec­tors.

He point­ed to in­creased man­u­fac­tur­ing out­put and on­go­ing plans for the south­ern econ­o­my—in­clud­ing re­fin­ery op­er­a­tions, wa­ter­front de­vel­op­ment, agri­cul­ture and tourism—as po­ten­tial growth dri­vers in the com­ing years.

In its re­port the IMF fur­ther stat­ed that high­er en­er­gy prices are ex­pect­ed to sup­port fis­cal and ex­ter­nal bal­ances in the near term, but cau­tioned that the out­look is sub­ject to “sig­nif­i­cant un­cer­tain­ty,” in­clud­ing geopo­lit­i­cal risks and po­ten­tial de­lays in en­er­gy projects.

He al­so urged au­thor­i­ties to strength­en fis­cal dis­ci­pline, boost rev­enue mo­bil­i­sa­tion and ac­cel­er­ate di­ver­si­fi­ca­tion, while us­ing any ex­cess en­er­gy rev­enues to re­build buffers such as the Her­itage and Sta­bil­i­sa­tion Fund.

Bal­dath Ma­haraj, al­so speak­ing on be­half of the busi­ness com­mu­ni­ty, said the Ch­agua­nas Cham­ber of In­dus­try and Com­merce“wel­comes the IMF 2026 re­port, es­pe­cial­ly the recog­ni­tion that the non-en­er­gy sec­tor and the strong fi­nan­cial sys­tem are what is dri­ving the 0.8 per cent growth.”

He added that it is “en­cour­ag­ing to see in­fla­tion re­turn to low lev­els, which brings some lev­el of sta­bil­i­ty to both con­sumers and busi­ness op­er­a­tors,” de­scrib­ing the cur­rent po­si­tion as “a sol­id foun­da­tion.”

How­ev­er, Ma­haraj stressed that the re­al chal­lenge lies in trans­lat­ing macro­eco­nom­ic sta­bil­i­ty in­to tan­gi­ble re­sults for busi­ness­es.

“Our fo­cus now, though, is how we can work to trans­late this pos­i­tive in­di­ca­tor in­to every­day suc­cess,” he said, adding that im­proved ac­cess to for­eign ex­change for small and medi­um-sized en­ter­pris­es could help turn “those very sta­ble fig­ures in­to thriv­ing pros­per­i­ty on the ground.