Trinidad & Tobago Country Statistics

LOCATION

Located 11 km (7 miles) off the north-eastern coast of Venezuela and at the most southern tip of the Caribbean archipelago, the twin-island nation of Trinidad and Tobago is strategically positioned for trade with neighbouring islands as well as with North and South America.

TRINIDAD AND TOBAGO ECONOMY

Trinidad and Tobago is the largest economy in the Caribbean Community (Caricom) and is highly dependent on its petroleum sector, which contributes approximately 32 percent of GDP and 82 percent of exports. In the early 1990s the petroleum sector evolved from being oil dominant to a natural gas dominant sector. Currently, Trinidad and Tobago is a leader in petrochemical exports and is one of the world’s largest exporters of ammonia and methanol. However, the sector is currently facing challenges with declining oil and gas production in addition to weak global energy prices. Average crude oil and condensate production have been trending downwards due to the decline in extraction from maturing hydrocarbon fields and the absence of significant new crude oil discoveries. Natural gas output has also trended downward because of disruptions for upgrades and other maintenance work. The poor performance of the sector was further compounded by weak global energy prices, with the West Texas Intermediate (WTI) oil price falling from an average of US$105.79 per barrel (p/b) in June, 2014 to an average of US$30.32 p/b in February, 2016. The average oil price has climbed to US$52.49 p/b in January, 2017 but is expected to remain low in 2017 at an average of US$53.46 p/b.

Between 2000 and 2007, the domestic economy experienced healthy expansion with real GDP growth averaging around 8 percent. Although Trinidad and Tobago weathered the 2008 financial crisis better than many other countries, economic growth has been patchy and the government has been running on fiscal deficits since then. In 2015, the economy contracted by 0.6 percent and it is projected to suffer another contraction of 2.3 percent in 2016. The poor performance of the energy sector has resulted in negative spill over effects in the non-energy sector and as a result, there have been some job losses, mainly in the distribution and construction sectors. In spite of this, this country still has a highly skilled and experienced workforce. The decline in export earnings and the tight foreign exchange market has placed some pressure on the TT currency, which has depreciated over the last year. Nonetheless, the foreign reserve position is still considered to be within a healthy range at around 11 months of import cover as at September, 2016.

Despite the numerous challenges, the country boasts a solid financial system and the relevant authorities remain committed towards becoming AML/CFT compliant in the near future. The nation also has a well developed industrial sector and a number of experienced industrial services companies. The domestic manufacturing sector is also diverse, with involvement in areas such as food processing, pharmaceuticals, alcoholic beverages, cosmetics, steel, cement, glass and plastics. Tobago is mainly dependent on tourism as it has strong nature and eco-tourism appeal.

Although Trinidad and Tobago’s fiscal position has been weakened due to declining energy sector revenues, the debt burden and the external debt position remain favourable. The Heritage and Stabilization Fund (HSF) also acts as a sizeable asset buffer for the domestic economy in the short-term. Going forward, the authorities are expected to remain committed to implementing sound fiscal consolidation and structural reforms. Currently, there is a greater need for diversification and this plan would focus mainly on tourism, international financial services and maritime activities. However, the energy sector will continue to be the mainstay for the economy over the next decade.