Raphael John-Lall

Bud­get 2027 mea­sures could help cush­ion the im­pact of T&T’s “strug­gling” econ­o­my, econ­o­mist Dr Mar­lene Attzs has said.

As dif­fer­ent stake­hold­ers con­tin­ue to de­bate whether the coun­try is in a re­ces­sion or not, she told the Busi­ness Guardian that the coun­try needs to dis­tin­guish be­tween a re­ces­sion and the broad­er is­sue of sus­tained eco­nom­ic/struc­tur­al weak­ness.

“A re­ces­sion gen­er­al­ly refers to a pe­ri­od of de­clin­ing eco­nom­ic ac­tiv­i­ty. Two con­sec­u­tive quar­ters of falling re­al Gross Do­mes­tic Prod­uct (GDP)…But whether we fo­cus on the tech­ni­cal de­f­i­n­i­tion or the wider eco­nom­ic pic­ture, there is clear ev­i­dence that T&T’s econ­o­my has been strug­gling,” said Attzs, who is al­so an In­de­pen­dent Sen­a­tor.

She re­ferred to some of the bud­get mea­sures that could soft­en the im­pact of the eco­nom­ic down­turn.

“There are mea­sures that could sup­port eco­nom­ic ac­tiv­i­ty. The ad­di­tion­al $250 for el­i­gi­ble grant re­cip­i­ents, al­lo­ca­tions to set­tle out­stand­ing wage ne­go­ti­a­tions and pro­posed pub­lic in­vest­ments could pro­vide some re­lief and stim­u­late de­mand,” Attzs said.

How­ev­er, she warned that the coun­try’s chal­lenges ex­tend be­yond whether it is tech­ni­cal­ly in a re­ces­sion.

She re­ferred to the Min­istry of Fi­nance’s Re­view of the Econ­o­my 2026 es­ti­mates that re­al GDP con­tract­ed by 0.5 per cent in 2025 and projects a fur­ther con­trac­tion of 2.2 per cent in 2026, with de­clines in both the en­er­gy and non-en­er­gy sec­tors.

The labour mar­ket has al­so weak­ened, with the num­ber of un­em­ployed peo­ple in­creas­ing from ap­prox­i­mate­ly 25,700 in the fi­nal quar­ter of 2025 to 31,900 in the first quar­ter of 2026.

Attzs said an­tic­i­pat­ed en­er­gy projects could con­tribute to re­cov­ery, but their im­pact would de­pend on when pro­duc­tion be­gins, how much ad­di­tion­al out­put is gen­er­at­ed and whether the ben­e­fits ex­tend to down­stream in­dus­tries, em­ploy­ment and for­eign-ex­change earn­ings.

“My con­cern is whether Bud­get 2027 presents a suf­fi­cient­ly co­her­ent and cred­i­ble path­way from these in­di­vid­ual mea­sures to sus­tained eco­nom­ic re­cov­ery.”

Attzs cau­tioned that high­er in­ter­na­tion­al en­er­gy prices do not nec­es­sar­i­ly trans­late in­to in­creased do­mes­tic pro­duc­tion or sus­tained eco­nom­ic trans­for­ma­tion.

She said the re­al test would be whether growth is sus­tained, broad-based, cre­ates de­cent em­ploy­ment, strength­ens pro­duc­tive ca­pac­i­ty and im­proves liv­ing stan­dards.

“We must be care­ful not to con­fuse a re­cov­ery in the num­bers with a re­cov­ery in peo­ple’s lives.”

The In­ter­na­tion­al Mon­e­tary Fund (IMF) last week re­flect­ed a re­cent World Bank re­port which showed that the T&T econ­o­my de­clined by mi­nus 0.5 per cent last year and is pro­ject­ed to ex­pe­ri­ence re­al growth of 0.2 per cent this year.

The IMF al­so projects that the do­mes­tic econ­o­my would grow by 2.2 per cent in 2027 and by 3.1 per cent in 2028.

Start­ing the cur­rent de­bate about the state of the econ­o­my, Op­po­si­tion Leader Pen­ne­lope Beck­les said the bud­get was pre­sent­ed against a back­drop of se­vere­ly de­te­ri­o­rat­ing eco­nom­ic con­di­tions in T&T adding that the coun­try is in the mid­dle of a re­ces­sion.

Busi­ness ex­pan­sion

Vivek Char­ran, chair­man of the Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers told the Busi­ness Guardian that it is “mis­lead­ing” to de­scribe T&T’s econ­o­my as be­ing in a re­ces­sion, ar­gu­ing that while eco­nom­ic ac­tiv­i­ty re­mains stag­nant in some sec­tors, oth­ers con­tin­ue to ex­pand.

Char­ran, who al­so chairs the SME Com­mit­tee of the Pri­vate Sec­tor Or­gan­i­sa­tion of T&T, said the coun­try was ex­pe­ri­enc­ing slow eco­nom­ic growth and that claims of a re­ces­sion risk ob­scur­ing the ac­tu­al con­di­tions fac­ing busi­ness­es.

“If we look at the econ­o­my, we can say for cer­tain that there is a lev­el of stag­nan­cy,” he said, point­ing par­tic­u­lar­ly to sec­tions of the re­tail sec­tor where com­mer­cial ac­tiv­i­ty has not gen­er­at­ed the cash flow busi­ness­es need to grow and, in some cas­es, sur­vive.

He at­trib­uted some of the dif­fi­cul­ties to the lin­ger­ing ef­fects of COVID-19 lock­downs, which kept many non-es­sen­tial busi­ness­es closed for an ex­tend­ed pe­ri­od, leav­ing some still deal­ing with debt and loan mora­to­ri­ums.

How­ev­er, Char­ran point­ed to the ex­pan­sion of su­per­mar­ket chains and phar­ma­cies, as well as strong week­end ac­tiv­i­ty at mall food courts, as ev­i­dence that per­for­mance varies across sec­tors.

Char­ran said the coun­try’s for­eign ex­change sup­ply prob­lems would per­sist un­less the en­er­gy sec­tor was rein­vig­o­rat­ed, along­side pol­i­cy changes de­vel­oped joint­ly by the Gov­ern­ment and pri­vate sec­tor.

“Do we have prob­lems with the sup­ply of forex? Yes, we have prob­lems with the sup­ply of forex. Is that some­thing that is re­al­ly go­ing to change un­til the en­er­gy sec­tor gets rein­vig­o­rat­ed? The an­swer to that ques­tion is, no, it won’t change. It can’t change un­til that time, un­less we al­so make changes and we cre­ate the poli­cies, the Gov­ern­ment and the pri­vate sec­tor work­ing to­geth­er,” he said.

On the 2027 na­tion­al bud­get, Char­ran said he was gen­er­al­ly sat­is­fied with the di­rec­tion out­lined by the Gov­ern­ment.

“We are on the path to change and re­cov­ery,” he said.

He said the bud­get ap­peared fo­cused large­ly on macro­eco­nom­ic mea­sures, so­cial sys­tems, tax­a­tion and rev­enue gen­er­a­tion, while greater at­ten­tion was need­ed on poli­cies to sup­port small-scale man­u­fac­tur­ing and eco­nom­ic di­ver­si­fi­ca­tion.

Char­ran ar­gued that lo­cal man­u­fac­tur­ers need bet­ter ac­cess to fi­nanc­ing, af­ford­able land and ware­hous­ing to ex­pand pro­duc­tion, sub­sti­tute im­ports and re­duce de­pen­dence on for­eign ex­change and cost­ly over­seas ship­ping.

Pos­i­tive Growth

The Ch­agua­nas Cham­ber of In­dus­try and Com­merce re­mains op­ti­mistic about T&T’s eco­nom­ic out­look, ar­gu­ing that the coun­try is not in a re­ces­sion de­spite the fi­nan­cial pres­sures fac­ing house­holds and busi­ness­es.

Cham­ber Pres­i­dent Bal­dath Ma­haraj told the Busi­ness Guardian that the coun­try’s macro­eco­nom­ic in­di­ca­tors and pro­jec­tions con­tin­ued to point to­wards pos­i­tive growth, dri­ven large­ly by the non-en­er­gy, ser­vices and com­mer­cial re­tail sec­tors.

“From an eco­nom­ic stand­point, the Cham­ber does not be­lieve T&T is in a re­ces­sion. A coun­try is in re­ces­sion when there are two con­sec­u­tive quar­ters of neg­a­tive GDP.”

How­ev­er, he ac­knowl­edged the hard­ship ex­pe­ri­enced by house­holds and small busi­ness­es, cit­ing for­eign ex­change short­ages, glob­al sup­ply chain pres­sures and cau­tious con­sumer sen­ti­ment as chal­lenges af­fect­ing dai­ly op­er­a­tions.

On the na­tion­al bud­get, he de­scribed the mea­sures as a com­bi­na­tion of nec­es­sary so­cial sup­port and fis­cal ad­just­ments that could sta­bilise the econ­o­my if im­ple­ment­ed ef­fec­tive­ly.

He said in­creased sup­port for low-in­come house­holds would help them cope with in­fla­tion and main­tain spend­ing pow­er, sup­port­ing lo­cal re­tail, food and con­sumer ser­vices.

He al­so wel­comed ef­forts to ad­dress out­stand­ing val­ue-added tax (VAT) re­funds, mod­ernise rev­enue col­lec­tion and ad­vance in­fra­struc­ture projects, pro­vid­ed these were im­ple­ment­ed ef­fi­cient­ly with­out cre­at­ing ad­di­tion­al bu­reau­cra­cy for com­pli­ant busi­ness­es.

Look­ing ahead, he said an­tic­i­pat­ed en­er­gy projects could gen­er­ate ad­di­tion­al rev­enue and im­prove the coun­try’s for­eign ex­change po­si­tion. It called for im­prove­ments in the ease of do­ing busi­ness, short­er port wait­ing times, bet­ter ac­cess to for­eign ex­change for trade and stronger sup­port for mi­cro, small and medi­um-sized en­ter­pris­es.

“The key to this suc­cess, how­ev­er is not on­ly in the bud­get but in the willpow­er to en­sure full ex­e­cu­tion of all our plans.”

Weak econ­o­my

T&T is “tech­ni­cal­ly in a re­ces­sion”, with two con­sec­u­tive quar­ters of neg­a­tive eco­nom­ic growth and sev­er­al oth­er in­di­ca­tors point­ing to weak­en­ing eco­nom­ic ac­tiv­i­ty, econ­o­mist Dr Ronald Ramkissoon says.

Ramkissoon told the Busi­ness Guardian that Gov­ern­ment sta­tis­tics showed neg­a­tive growth in the fourth quar­ter of 2025 and the first quar­ter of 2026.

“There is no need to waste en­er­gy in quib­bling about it,” he said.

Ramkissoon said the Bud­get’s mea­sures to tax busi­ness­es were un­like­ly to en­cour­age eco­nom­ic growth. He al­so ques­tioned whether cap­i­tal ex­pen­di­ture un­der the Pub­lic Sec­tor In­vest­ment Pro­gramme (PSIP) would have a sig­nif­i­cant im­pact on GDP.

He al­so iden­ti­fied high­er en­er­gy pro­duc­tion and prices as po­ten­tial sources of growth in fis­cal 2027.

“Nev­er­the­less, ex­pect­ed gas and crude oil pro­duc­tion would con­tribute to GDP growth and con­tin­u­ing high en­er­gy prices can al­so re­sult in some growth in 2027.”