The Cen­tral Bank of Trinidad and To­ba­go (CBTT) says do­mes­ti­cal­ly, the flu­id geopo­lit­i­cal ten­sion be­tween the Unit­ed States and 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 CBTT said in its Mon­e­tary Pol­i­cy state­ment is­sued on Wednes­day, the the last work­ing day in 2025.

It said that 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 CBTT warned.

Ac­cord­ing to the pol­i­cy state­ment, do­mes­ti­cal­ly, a boost to nat­ur­al gas pro­duc­tion in the sec­ond quar­ter of 2025, with first gas from bpTT’s Cypre and bpTT/EOG’s Men­to fields, un­der­pinned a resur­gence in en­er­gy sec­tor out­put 10.4 per cent year-on-year.

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). Mean­while, the slow­down in non-en­er­gy sec­tor ac­tiv­i­ty is es­ti­mat­ed to have per­sist­ed dur­ing the sec­ond quar­ter of 2025.

“In­di­ca­tors mon­i­tored by the Cen­tral Bank sug­gest soft­er per­for­mances for the dis­tri­b­u­tion, con­struc­tion and man­u­fac­tur­ing sec­tors, which coun­tered gains in the fi­nance and util­i­ties sec­tors.”

The CBTT said that do­mes­tic in­fla­tion has held firm at the low­er end of sin­gle dig­its dur­ing the sec­ond half of 2025 and that head­line in­fla­tion, as mea­sured by the Cen­tral Sta­tis­ti­cal Of­fice’s (CSO) Con­sumer Price In­dex, mea­sured 0.5 per cent in No­vem­ber 2025 com­pared with 1.5 per cent in June 2025.

It said core in­fla­tion, which ex­cludes food prices, rose by 0.5 per cent while food in­fla­tion de­cel­er­at­ed to 0.8 per cent, pulled down by low­er in­ter­na­tion­al food prices and few weath­er-re­lat­ed dis­rup­tions to do­mes­tic agri­cul­tur­al sup­plies. Build­ing ma­te­r­i­al price in­creas­es slowed to 1.5 per cent year-on-year dur­ing the third quar­ter of 2025 com­pared with 2.2 per cent the pre­vi­ous quar­ter.

The CBTT said that do­mes­tic fi­nan­cial con­di­tions are fine­ly bal­anced. It said sys­tem liq­uid­i­ty con­straints have eased in re­cent months, de­spite con­tin­ued gov­ern­ment bor­row­ing ac­tiv­i­ty and no­table upticks in in­ter­bank and re­po mar­ket ac­tiv­i­ty.

“Af­ter de­clin­ing to TT$3.5 bil­lion in Oc­to­ber 2025, com­mer­cial banks’ ex­cess re­serves at the Cen­tral Bank av­er­aged TT$4.4 bil­lion in No­vem­ber 2025 and rose fur­ther to TT$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 CBTT said that 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). Con­sumer lend­ing growth slowed to eight per cent from 9.7 per cent over the same pe­ri­od, dri­ven by low­er loan de­mand for cred­it cards, mo­tor ve­hi­cles and bridg­ing fi­nance. Re­al es­tate mort­gage loans in­creased by 5.8 per cent.

The CBTT said that its Mon­e­tary Pol­i­cy Com­mit­tee (MPC) has not­ed that glob­al in­fla­tion­ary pres­sures have fared much bet­ter, though not ful­ly con­tained, than ini­tial ex­pec­ta­tions when the US rec­i­p­ro­cal tar­iff regime was first an­nounced in April 2025.

The MPC al­so con­sid­ered that ag­gre­gate de­mand may in­crease as house­hold in­comes are perched to re­ceive a boost in the com­ing months.

“Against this back­drop, giv­en Trinidad and To­ba­go’s high propen­si­ty to im­port, safe­guard­ing the coun­try’s in­ter­na­tion­al re­serves be­comes para­mount. 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 CBTT said.

It said giv­en the soft­ness in the non-en­er­gy sec­tor, re­flect­ed in part by slow­ing busi­ness cred­it growth, and in the con­text of low in­fla­tion and the nar­row­ing of the TT-US short term in­ter­est rate dif­fer­en­tial, the MPC agreed to main­tain the re­po rate at 3.50 per cent.

“The MPC will ac­tive­ly mon­i­tor the like­ly ef­fects of re­cent wage ad­just­ments on ag­gre­gate de­mand and im­port growth in the com­ing months. The MPC is pre­pared to take the nec­es­sary mon­e­tary pol­i­cy ac­tions to main­tain a pru­dent bal­ance be­tween safe­guard­ing the for­eign re­serves and fos­ter­ing favourable fund­ing con­di­tions sup­port­ive of do­mes­tic eco­nom­ic ac­tiv­i­ty,” the CBTT said in its pol­i­cy state­ment. —PORT OF SPAIN, Trinidad (CMC)