De­spite some promis­ing mo­ments in the en­er­gy sec­tor mid-year, the Cen­tral Bank not­ed there has been a no­tice­able slow­down in busi­ness in the non-en­er­gy sec­tor, es­pe­cial­ly giv­en the un­cer­tain­ty cre­at­ed by the ten­sions be­tween the Unit­ed States and Venezuela.

In the Cen­tral Bank’s Mon­e­tary Pol­i­cy An­nounce­ment for De­cem­ber 2025, the Cen­tral Bank said that while there was less of a neg­a­tive im­pact from the US tar­iff im­po­si­tion in April, the on­go­ing stand­off has shak­en con­fi­dence in the lo­cal busi­ness sec­tor.

“Do­mes­ti­cal­ly, the flu­id geopo­lit­i­cal ten­sion be­tween the US and neigh­bour­ing Venezuela is con­tribut­ing to build­ing eco­nom­ic un­cer­tain­ty. Nonethe­less, in­fla­tion is well con­tained, cred­it growth is still rea­son­able and liq­uid­i­ty con­di­tions have im­proved. How­ev­er, eco­nom­ic growth is some­what ten­ta­tive.”

The an­nounce­ment made ref­er­ence to boost in nat­ur­al gas pro­duc­tion as a re­sult of first gas re­ceived from bpTT’s Cypre and bpTT/EOG’s Men­to fields. But the Cen­tral Bank stat­ed, “The pos­i­tive ef­fect of high­er en­er­gy pro­duc­tion in the sec­ond quar­ter of 2025, dri­ven by two new nat­ur­al gas fields, may be par­tial­ly off­set by a non-en­er­gy sec­tor that is los­ing mo­men­tum across sev­er­al sub-sec­tors. This sug­gests that the do­mes­tic econ­o­my is still in need of sup­port to en­gen­der a sus­tained re­cov­ery.”

The Cen­tral Bank said, “Ac­cord­ing to da­ta from the Min­istry of En­er­gy and En­er­gy In­dus­tries for the sec­ond quar­ter of 2025, the pro­duc­tion of nat­ur­al gas rose by 11.7 per cent (year-on-year), while crude oil pro­duc­tion in­creased by 8.9 per cent. The petro­chem­i­cal in­dus­try record­ed ex­pan­sions in am­mo­nia (23.6 per cent) and urea (51.3 per cent), while methanol out­put con­tin­ued to de­cline (-12.7 per cent).”

How­ev­er, the an­nounce­ment added, “De­spite con­tin­ued Gov­ern­ment bor­row­ing ac­tiv­i­ty and no­table upticks in in­ter­bank and re­po mar­ket ac­tiv­i­ty, af­ter de­clin­ing to $3.5 bil­lion in Oc­to­ber 2025, com­mer­cial banks’ ex­cess re­serves at the Cen­tral Bank av­er­aged $4.4 bil­lion in No­vem­ber 2025, and rose fur­ther to $5.3 bil­lion by mid-De­cem­ber 2025.

“Con­verse­ly, the pace of pri­vate sec­tor cred­it ex­pan­sion has slowed. Pri­vate sec­tor cred­it rose by 6.3 per cent (year-on-year) in Oc­to­ber 2025, down from growth of 8.6 per cent in June 2025. The slow­down was pri­mar­i­ly in­flu­enced by more mod­est busi­ness cred­it growth (6.6 per cent in Oc­to­ber com­pared with 11.8 per cent in June 2025).”

The re­port al­so not­ed there was a re­cov­ery in the coun­try’s for­eign re­serves, as it stat­ed giv­en T&T’s high propen­si­ty to im­port, it was cru­cial to safe­guard the coun­try’s in­ter­na­tion­al re­serves.

The re­port said, “Trinidad and To­ba­go’s for­eign re­serves sta­bilised in re­cent months, mov­ing from US$4.6 bil­lion in Oc­to­ber 2025 to US$5.3 bil­lion as at De­cem­ber 19, 2025. How­ev­er, con­ven­tion­al in­ter­na­tion­al in­di­ca­tors of re­serve ad­e­qua­cy sug­gest close mon­i­tor­ing is war­rant­ed.”

The MPC said de­spite this, do­mes­tic in­fla­tion has held firm at the low­er end of sin­gle dig­its dur­ing the sec­ond half of 2025 and giv­en all con­sid­er­a­tions, it de­cid­ed to main­tain the re­po rate at 3.50 per cent.