Trinidad and Tobago's Economic Recovery

Trinidad and Tobago Economy Strengthens Amid Structural Reforms and Energy Transition

April 10, 2026

Dave Dookie, Managing Director

• Economic Recovery Underway but Gradual: Trinidad and Tobago’s economy is stabilizing, with modest GDP growth (0.7% in 2026).

• Strong External Position but Fiscal Risks Persist: The country maintains a current account surplus and adequate reserves (6.4 months import cover), supported by the Heritage and Stabilization Fund.

• Foreign Exchange Constraints Continue: Persistent foreign exchange shortages are limiting business activity, greater exchange rate flexibility and tighter macroeconomic policies could improve external balance.

• Global Markets Show Strong Momentum: U.S. equities led gains over the past week (S&P 500 +3.6%, Nasdaq +4.7%), with Europe also advancing, while Asia delivered mixed.   

• Local Market Activity Strengthens: Trinidad and Tobago’s stock market saw a sharp increase in trading volumes and value, with gains in major indices driven by large-cap stocks and strong performance in energy and dividend-paying equities.

Trinidad and Tobago’s economic outlook continues to show gradual improvement, supported by stabilisation in the non-energy sector and targeted policy measures aimed at revitalising growth. According to the IMF’s February 2026 Article IV Mission Report, the economy is steadily recovering toward pre-pandemic levels, although structural headwinds persist, particularly from subdued energy production and ongoing foreign exchange shortages. The non-energy sector, in particular manufacturing and services, has been the primary driver of recent growth.

The IMF estimates that real GDP growth remained modest at approximately 0.8% in 2025 and is projected at 0.7% in 2026. However, the medium-term outlook is more constructive, with growth expected to accelerate to 2.9% in 2027 and 3.5% in 2028 as new gas projects come onstream. Inflation is expected to stabilise around 2% over the medium term, while unemployment remains moderate at approximately 4.8%.

Externally, the country maintains a current account surplus projected to average around 3% of GDP in 2026. Foreign reserves remain adequate at roughly 6.4 months of import cover, and the Heritage and Stabilization Fund continues to provide a strong fiscal buffer, the Fund's capital base is expected to increase with additional contributions from the recent increase in Crude Oil price and an increase in domestic exploration and production activities.

Fiscal vulnerabilities remain a concern, with the deficit estimated at 5.5% of GDP in FY2025 and public debt near 68% of GDP. While the 2026 Budget introduces measures to improve revenues and fiscal discipline, further consolidation is required to ensure long-term sustainability. Foreign exchange shortages continue to constrain business activity. The IMF suggests that greater exchange rate flexibility and tighter macroeconomic policy could support external rebalancing and improve foreign exchange availability.

The IMF emphasized the need for diversification, improved business conditions, and increased private investment. Noted are the initiatives required to improved growth; (i) regional energy collaboration, (ii) deepwater exploration, and (iii) economic diversification policies that are expected to support medium-term growth. In addition, proposed reforms to pensions, fiscal frameworks, and tax administration are critical to enhancing long-term sustainability.

Compared to regional peers, Trinidad and Tobago’s growth profile remains moderate but stable. Latin American economies such as Brazil and Mexico are expected to grow at lower rates, while Argentina shows stronger expansion. Trinidad and Tobago’s comparative advantage remains its energy sector and strong external buffers, including the Heritage and Stabilization Fund, which continues to provide fiscal resilience.

Global Equity Markets

On the other hand, turning to global markets, U.S. equity markets delivered strong performance over the last five trading days. The S&P 500 rose approximately 3.6%, the Dow Jones Industrial Average gained 3.0%, and the Nasdaq Composite advanced 4.7%. The rally was led by technology stocks, reflecting continued investor optimism around artificial intelligence and resilient corporate earnings.

In the UK and Europe, equity markets also posted gains. The FTSE 100 rose approximately 1.6%, while the Euro Stoxx 50 gained 4.1% and the STOXX 600 increased around 3.0%. European markets were supported by energy stocks and improved cyclical sentiment, although some volatility persisted due to global macro uncertainty and interest rate expectations.

Asian markets were more mixed. Japan’s Nikkei 225 surged over 7% during the week, supported by strong corporate performance and investor inflows. Meanwhile, China’s Shanghai Composite recorded more modest gains, reflecting ongoing concerns about domestic economic conditions. Hong Kong and Australia also posted positive returns, indicating a cautiously improving regional outlook.

Domestic Market Activity

Trading activity on the Trinidad and Tobago Stock Exchange strengthened meaningfully over the past week, with total volumes rising by 112.2% to 2.27 million shares and market value surging by 693.5% to $55.6 million, reflecting increased investor participation and block trades in key names. The Composite Index rose 0.51% to 934.46, while the All T&T Index advanced 0.60%, driven largely by strength in large-cap domestic equities.

Sector performance was led by energy and consumer names, with Trinidad and Tobago NGL Limited emerging as the top performer, gaining 12.19%, followed by West Indian Tobacco and Unilever Caribbean, reflecting renewed investor demand for dividend-paying equities.

In Fixed Income market, domestic liquidity remained elevated at $5.11 billion despite a modest weekly decline, supporting stable conditions across the government and corporate bond market.

Overall, Trinidad and Tobago enters the second quarter 2026 with a stabilizing macroeconomic environment and a gradual recovery trajectory. While risks remain, particularly related to energy production and fiscal consolidation, the medium-term outlook is improving. Combined with supportive global equity market performance, the investment environment remains constructive, particularly for investors seeking exposure to energy-linked and emerging market opportunities.

Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago based financial advisory firm specializing in investment management, capital markets and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London and has completed advanced training in data science through the MIT Applied Data Science Program.

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