Trinidad and Tobago: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Trinidad and Tobago

June2024 IMFCountryReportNo.24/150 TRINIDADANDTOBAGO 2024ARTICLEIVCONSULTATION—PRESSRELEASE;STAFFREPORT;ANDSTATEMENTBYTHEEXECUTIVEDIRECTORFORTRINIDADANDTOBAGO UnderArticleIVoftheIMF’sArticlesofAgreement,theIMFholdsbilateraldiscussionswithmembers,usuallyeveryyear.Inthecontextofthe2024ArticleIVconsultationwithTrinidadandTobago,thefollowingdocumentshavebeenreleasedandareincludedinthispackage: APressReleasesummarizingtheviewsoftheExecutiveBoardasexpressedduringitsMay8,2024considerationofthestaffreportthatconcludedtheArticleIVconsultationwithTrinidadandTobago. TheStaffReportpreparedbyastaffteamoftheIMFfortheExecutiveBoard’sconsiderationonMay8,2024,followingdiscussionsthatendedonMarch8,2024,withtheofficialsofTrinidadandTobagooneconomicdevelopmentsandpolicies.Basedoninformationavailableatthetimeofthesediscussions,thestaffreportwascompletedonApril23,2024. AnInformationalAnnexpreparedbytheIMFstaff. AStatementbytheExecutiveDirectorforTrinidadandTobago.Thedocumentslistedbelowhavebeenorwillbeseparatelyreleased: SelectedIssues TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. Copiesofthisreportareavailabletothepublicfrom InternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.org InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund PR24/200 IMFExecutiveBoardConcludes2024ArticleIVConsultationwithTrinidadandTobago FORIMMEDIATERELEASE Washington,D.C.–June5,2024:OnMay8,2024,theExecutiveBoardoftheInternationalMonetaryFund(IMF)concludedtheArticleIVconsultationwithTrinidadandTobago.1 Forthefirsttimeinadecade,TrinidadandTobagoisundergoingagradualandsustainedeconomicrecovery.RealGrossDomesticProduct(GDP)isestimatedtohavefurtherexpandedby2.1percentin2023,reflectingastrongperformanceofthenon-energysector.Inflationhasdeclinedsharply,mainlyduetodeceleratingglobalfoodandimportedgoodsprices.Banks’credittotheprivatesectorcontinuestoexpandandthefinancialsectorappearssoundandstable.Thecurrentaccountisestimatedtoremaininasurplusin2023,andinternationalreservecoverageisadequateat8.3monthsofprospectivetotalimports.The fiscaldeficitinFY2023continuedsupportingtherecoveryandwasbetterthanbudgeted,whilepublicsectordebtremainedbelowtheauthorities’softdebttarget. Economicgrowthisprojectedtogainmomentumin2024,supportedbythenon-energyandenergysectors,andinflationisprojectedtoremainlow.Thecurrentaccountsurpluswillnarrowmainlyduetoadeclineinenergypricesandenergyexportsandisestimatedat5.7percentofGDPin2024.Internationalreservecoverageisexpectedtoremainadequateat7.5monthsofprospectivetotalimports.ExternalpublicbuffersintheHeritageandStabilizationFundarelargeatabout20percentofGDP.Thefiscalpositionisprojectedtoremainadequate,reachingadeficitof2.7percentofGDPinFY2024.Thisreflectslowerenergyrevenues,increasedcapitalspending,andahigherwagebill—duetothelong-standingpublicwagesettlementwithsomeunions. Thebalanceofrisksistiltedtothedownsideintheneartermbutthereareupsiderisksinthemediumterm.Inthenearterm,downsiderisksstemfromexternalfactorsaffectingenergymarkets(e.g.,anabruptglobalslowdown)anddomesticsourcessuchasdisappointmentsinenergyproduction(e.g.,delaystonewprojects,orunexpecteddisruptionstocurrent production).Inthemediumterm,upsiderisksstemfromnewnaturalgasprojectsandtheimplementationofplannedstructuralreformswhichcouldboostgrowth. ExecutiveBoardAssessment2 ExecutiveDirectorsagreedwiththethrustofthestaffappraisal.TheywelcomedTrinidadandTobago’ssustainedeconomicrecovery,sharpdeclineininflationin2023,andstrongexternalposition.Directorsconsideredthat,whiletheoutlookisfavorable,thebalanceofrisksistilted 1UnderArticleIVoftheIMF'sArticlesofAgreement,theIMFholdsbilateraldiscussionswithmembers,usuallyeveryyear.Astaffteamvisitsthecountry,collectseconomicandfinancialinformation,anddiscusseswithofficialsthecountry'seconomicdevelopmentsandpolicies.Onreturntoheadquarters,thestaffpreparesareport,whichformsthebasisfordiscussionbytheExecutiveBoard. 2Attheconclusionofthediscussion,theManagingDirector,asChairmanoftheBoard,summarizestheviewsofExecutiveDirectors,andthissummaryistransmittedtothecountry'sauthorities.Anexplanationofanyqualifiersusedinsummingupcanbefoundhere:http://www.IMF.org/external/np/sec/misc/qualifiers.htm. 2 tothedownsideinthenear-termandtotheupsideinthemediumterm.Goingforward,theyemphasizedtheneedforreformstostrengthentheeconomicrecovery,rebuildbuffers,andsecureamorediversified,green,resilient,andinclusiveeconomy. Directorshighlightedthatstrengtheningthemedium-termfiscalpositionwouldhelprebuild fiscalbuffersandmaintainpublicdebtwellbelowtheauthorities’softdebttarget.Theyagreedthatdevelopingarules-basedfiscalframeworkandasounddebtmanagementstrategywouldhelpstrengthenfiscalmanagementandmitigatemacro-financialrisks.Directorsunderscoredtheneedtoaddressfiscalrisksfromthepensionsystemandenergytransitionandcom