Central Bank reports rising food prices but improved fiscal performance

GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

Trinidad and To­ba­go record­ed a mod­est rise in in­fla­tion in 2025, dri­ven large­ly by high­er in­ter­na­tion­al food prices, even as im­proved en­er­gy rev­enues helped nar­row the coun­try’s fis­cal deficit, the Cen­tral Bank has re­port­ed.

In its An­nu­al Eco­nom­ic Sur­vey 2025, re­leased yes­ter­day, the Cen­tral Bank said head­line in­fla­tion av­er­aged 1.0 per cent for the year, up from 0.5 per cent in 2024.

The in­crease in con­sumer prices was un­even across the coun­try, with ad­min­is­tra­tive ar­eas such as Ch­agua­nas and Siparia record­ing more pro­nounced price move­ments dur­ing the re­view pe­ri­od.

The cost of liv­ing pres­sures were most ev­i­dent in food prices, with food in­fla­tion ris­ing to an av­er­age of 3.0 per cent in 2025, dou­ble the 1.5 per cent record­ed the pre­vi­ous year.

Core in­fla­tion, which ex­cludes food, al­so edged high­er to 0.5 per cent, com­pared with 0.2 per cent in 2024.

“The in­crease in core in­fla­tion re­flect­ed high­er prices in sev­er­al sub-in­dices, par­tic­u­lar­ly the al­co­holic bev­er­ages; and to­bac­co; hous­ing, wa­ter, elec­tric­i­ty, gas and oth­er fu­els; and recre­ation and cul­ture sub-in­dices. A faster price in­crease was record­ed in the al­co­holic bev­er­ages and to­bac­co cat­e­go­ry (5.8 per cent in 2025 com­pared to 3.7 per cent in 2024) due to high­er prices for whisky, brandy, vod­ka, shandy and cig­a­rettes.

“The pri­ma­ry dri­ver of the in­crease in prices was high­er ex­cise and cus­tom du­ties for al­co­holic bev­er­ages and to­bac­co, as an­nounced in the FY2025/26 na­tion­al bud­get. No­tably, high­er prices in a few hous­ing sub-com­po­nents (main­ly im­put­ed rent on home­own­er­ship and gen­er­al ma­son­ry and plas­ter­ing) in­flu­enced the in­crease in the hous­ing, wa­ter, elec­tric­i­ty, gas and oth­er fu­els sub-in­dex (0.3 per cent in 2025 com­pared to -1.3 per cent in 2024). Sim­i­lar­ly, the recre­ation and cul­ture sub-in­dex rose in 2025 (0.6 per cent com­pared to -0.8 per cent in 2024),” the bank out­lined.

In con­trast, the con­struc­tion sec­tor showed signs of eas­ing cost pres­sures. The Build­ing Ma­te­ri­als In­dex (BMI) rose by 1.4 per cent in 2025, slow­er than the 2.5 per cent in­crease record­ed in 2024.

This de­cel­er­a­tion was most ev­i­dent in site prepa­ra­tion and con­crete frames, which rose by 2.1 per cent com­pared with 7.0 per cent a year ear­li­er, and elec­tri­cal com­po­nents, which in­creased by 2.8 per cent ver­sus 5.1 per cent in 2024.

While win­dows and doors record­ed a mar­gin­al in­crease of 0.1 per cent, oth­er cat­e­gories ex­pe­ri­enced price de­clines. Plumb­ing and fin­ish­ing cat­e­gories, in par­tic­u­lar, showed weak­er prices, sug­gest­ing some cool­ing in ma­te­r­i­al costs de­spite broad­er in­fla­tion­ary pres­sures.

On the labour mar­ket, the sur­vey not­ed mixed con­di­tions dur­ing the first nine months of 2025. Cen­tral Sta­tis­ti­cal Of­fice (CSO) da­ta showed the un­em­ploy­ment rate av­er­aged 4.5 per cent be­tween Jan­u­ary and Sep­tem­ber 2025, an im­prove­ment from 4.8 per cent over the same pe­ri­od in 2024.

Em­ploy­ment gains were record­ed across sev­er­al sec­tors, led by whole­sale and re­tail trade, restau­rants and ho­tels, fol­lowed by man­u­fac­tur­ing (in­clud­ing min­ing and quar­ry­ing, and ex­clud­ing sug­ar and oil).

In­creas­es were al­so record­ed in fi­nance, in­sur­ance and re­al es­tate; trans­port, stor­age and com­mu­ni­ca­tions; and agri­cul­ture (in­clud­ing forestry, hunt­ing and fish­ing).

How­ev­er, em­ploy­ment de­clined sig­nif­i­cant­ly in the com­mu­ni­ty, so­cial and per­son­al ser­vices sec­tor, co­in­cid­ing with an­nounced re­forms to Gov­ern­ment-sup­port­ed em­ploy­ment pro­grammes and a shift away from con­trac­tu­al roles to­wards more per­ma­nent po­si­tions.

Fis­cal Op­er­a­tions

The Cen­tral Gov­ern­ment’s fis­cal per­for­mance for the 2024/25 fi­nan­cial year ex­ceed­ed ex­pec­ta­tions, with the bud­get deficit nar­row­ing to $8.1 bil­lion, or 4.6 per cent of gross do­mes­tic prod­uct (GDP).

This rep­re­sents an im­prove­ment on the re­vised deficit of $9.7 bil­lion (5.3 per cent of GDP) and the $9.1 bil­lion (5.3 per cent of GDP) record­ed in the pre­vi­ous fis­cal year.

The sur­vey at­trib­uted the im­proved fis­cal po­si­tion pri­mar­i­ly to stronger en­er­gy sec­tor rev­enues, which off­set de­clines in non-en­er­gy in­come and sup­port­ed the over­all fis­cal bal­ance.

How­ev­er, struc­tur­al chal­lenges re­main. As non-en­er­gy rev­enues de­clined, the non-en­er­gy fis­cal deficit widened to $24.0 bil­lion, or 13.7 per cent of GDP, up from $22.5 bil­lion (13.1 per cent of GDP) in 2023/24.

While high­er en­er­gy rev­enues have pro­vid­ed short-term re­lief, the re­port high­light­ed on­go­ing pres­sures to di­ver­si­fy rev­enue sources and main­tain fis­cal dis­ci­pline.

The sur­vey not­ed that Trinidad and To­ba­go’s econ­o­my is ex­pect­ed to sta­bilise in the short to medi­um term, al­though the out­look re­mains con­strained by struc­tur­al chal­lenges and glob­al un­cer­tain­ty.

The en­er­gy sec­tor is set to ben­e­fit from pro­duc­tion at bpTT’s Cypre and Men­to fields.

“How­ev­er, pro­duc­tion lev­els are un­like­ly to el­e­vate be­yond al­ready achieved lev­els. High­er en­er­gy rev­enues may sup­port achieve­ment of the bud­get­ed fis­cal deficit in FY2025/26, es­ti­mat­ed at $3.9 bil­lion (2.2 per cent of GDP). How­ev­er, a num­ber of un­bud­get­ed ex­pen­di­ture items may re­sult in a slight­ly high­er fis­cal deficit.

“The pick-up in do­mes­tic en­er­gy pro­duc­tion, cou­pled with high­er in­ter­na­tion­al gas prices, may fa­cil­i­tate sol­id en­er­gy ex­ports and in­form a favourable net goods trad­ing po­si­tion,” the bank added.