Anticipating recovery in oil and gas production, the IMF is projecting growth for Trinidad and Tobago of 5.7% and headline inflation of 2.4% in 2022.
These projections reflect the findings of the recently concluded Article IV consultations, which projected a decline in real GDP of 1% for 2021, however the inflation rate of 2.2% as at July 2021 remains a data point of interest. At 10.1% of GDP, the overall fiscal deficit in FY2021 remained high due to continued weak revenue performance.
As a result of the large deficits and the deep GDP contraction, central government debt rose sharply from 45.4% in FY2019 to 66% of GDP in FY2021. Public debt rose to 87% of GDP, significantly surpassing the government’s soft public debt target of 65% of GDP. The fiscal deficit is projected to narrow to 7.5% of GDP in FY2022, reflecting a combination of higher revenue mobilization and modest spending cuts. Over the medium term, the fiscal deficit is projected to gradually narrow and reach balance by FY2027. Central government debt will peak at about 69% of GDP in FY2023 and thereafter gradually decline. (IMF)
Extract from the CARICOM BUSINESS Newsletter Vol 4 no 46
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