The IMF’s 2026 Article IV report presents Trinidad and Tobago’s energy sector as one of the main factors shaping the country’s economic outlook. While the wider economy continues to recover, the report makes clear that weak production from mature oil and natural gas fields is still weighing on growth.
The non-energy sector, especially manufacturing and services, has been carrying much of the recovery. The energy sector, by contrast, has remained under pressure.
According to the IMF, energy sector growth was only 0.4 per cent in 2024, before an estimated contraction of 0.5 per cent in 2025. The sector is projected to contract further by 4.5 per cent in 2026. This is one of the reasons the overall real GDP growth is expected to remain modest, at 0.8 per cent in both 2025 and 2026.
The report also shows how the structure of the economy is continuing to shift. The energy sector accounted for 22.5 per cent of GDP in 2024, an estimated 20.9 per cent in 2025, and is projected to fall slightly to 20.7 per cent in 2026. The non-energy sector, by comparison, is expected to account for 79.3 per cent of GDP in 2026.
However, the energy sector remains critical to government revenue and foreign exchange. Energy revenue is estimated at 9.9 per cent of GDP in 2025 and is projected to rise to 10.2 per cent in 2026. This reflects the effect of higher global energy prices, even as production remains weak. The IMF projects Brent crude to rise from US$68.30 per barrel in 2025 to US$80.20 per barrel in 2026, while Henry Hub natural gas is projected at US$3.60 per MMBtu in 2025 and US$3.50 per MMBtu in 2026.
This price support is expected to help the country’s fiscal and external balances in the near term. The IMF notes that higher energy prices give T&T an opportunity to rebuild financial buffers, including through deposits into the Heritage and Stabilisation Fund. At the same time, the report makes clear that this support depends heavily on global prices, while local production challenges remain.
The energy sector is also central to T&T’s foreign exchange position. The IMF states that energy accounts for about 75 per cent of the country’s foreign exchange supply. As energy production has declined, foreign exchange inflows have weakened, contributing to tighter conditions in the foreign exchange market. Higher energy prices are expected to provide some relief in 2026, but the report still identifies foreign exchange shortages as an ongoing macroeconomic concern.
On the external side, the current account remains in surplus, supported in part by energy exports. The IMF projects the current account surplus to rise from 3.1 per cent of GDP in 2025 to 3.8 per cent in 2026. At the same time, gross official reserves are projected to fall from US$5.37 billion in 2025 to US$4.81 billion in 2026, equal to 5.5 months of prospective imports. This suggests that while energy exports continue to support the external position, reserve pressures remain.
The medium-term outlook is more positive. The IMF expects growth to strengthen from 2027 as new energy projects come onstream, particularly Manatee. Real GDP growth is projected to rise to 3 per cent in 2027 and average about 3.5 per cent in 2028 and 2029. These projects are expected to provide a lift to the economy after a weaker near-term period for energy production.
The report also notes that the new administration is looking to encourage new investment in the sector. This includes enhanced recovery from mature fields, deepwater exploration bids, and regional collaboration with Guyana, Suriname, and Venezuela. These efforts are part of a wider push to support growth while continuing to diversify the economy.
The Finance Bill, 2026 includes energy-related amendments aimed at marginal marine gas fields. The Bill proposes a lower 8 per cent royalty rate on natural gas won and saved from certified marginal marine gas fields, compared with the general royalty rate of 12.5 per cent that appears to apply under the existing Petroleum Regulations. It also introduces enhanced capital allowances for qualifying expenditure on machinery, plant, and other costs linked to these fields.
A marginal marine gas field is defined in the Bill as an offshore shallow water field with recoverable gas resources of 300 billion cubic feet or less, an internal rate of return below 15 per cent as a standalone project, and which comes into production after January 1, 2026. The field would also have to be certified by the Minister of Energy and Energy Industries.
This measure also links back to the issues highlighted in the report. The IMF pointed to weak energy production, declining output from mature oil and gas fields, and the need to improve the energy sector’s fiscal regime to support investment. In that context, the Finance Bill appears to be one possible policy response, as it creates more favourable fiscal treatment for smaller offshore gas fields that may otherwise be difficult to develop commercially.
Overall, the IMF’s message is that T&T’s energy sector remains central to the country’s outlook, even as its share of GDP declines.
Mature field decline and weaker production are expected to limit growth in the short term. From 2027 onward, new projects and stronger investment activity could help improve the outlook, especially if higher energy prices continue to support revenue and foreign exchange earnings.
