Raphael John-Lall

Pro­fes­sor of eco­nom­ics at the Uni­ver­si­ty of the West In­dies (UWI), St. Au­gus­tine cam­pus, Roger Ho­sein is pre­dict­ing a long, hard road ahead and a “slow re­cov­ery” over the next few years as the new Unit­ed Na­tion­al Con­gress (UNC) Gov­ern­ment takes the reins of the econ­o­my.

The UNC won the 2025 gen­er­al elec­tion last Mon­day, tak­ing 26 of the 41 con­stituen­cies, with the pre­vi­ous rul­ing par­ty, the Peo­ple’s Na­tion­al Move­ment win­ning 13 seats and the To­ba­go Peo­ple’s Par­ty led by Far­ley Au­gus­tine bag­ging To­ba­go East and To­ba­go West.

The pre­vi­ous Peo­ple’s Na­tion­al Move­ment (PNM) ad­min­is­tra­tion gov­erned the coun­try for the last ten years which saw a de­cline of not on­ly some of the eco­nom­ic in­dices but there was al­so a neg­a­tive im­pact on the coun­try’s so­cial fab­ric.

“Against the back­drop of sus­tained eco­nom­ic con­trac­tion and de­te­ri­o­rat­ing macro-fis­cal fun­da­men­tals, the path to re­cov­ery will be slow and bound­ed by struc­tur­al rigidi­ties. Out­put lev­els re­main sig­nif­i­cant­ly be­low pre-2015 bench­marks, and po­ten­tial Gross Do­mes­tic Prod­uct (GDP) growth is like­ly sub­dued un­less bold re­forms are pur­sued,” Ho­sein told the Sun­day Busi­ness Guardian.

Giv­en the frag­ile non-en­er­gy fis­cal po­si­tion and ex­ter­nal im­bal­ances, he said any pre­ma­ture fis­cal ex­pan­sion of re­cur­rent ex­pen­di­tures may wors­en debt dy­nam­ics and crowd out pro­duc­tive in­vest­ment.

“Labour mar­ket slack, com­bined with weak cap­i­tal ac­cu­mu­la­tion, would like­ly sug­gest a slug­gish mul­ti­pli­er ef­fect from new spend­ing. In this re­gard, I urge that pol­i­cy­mak­ers, unions and all stake­hold­ers man­age ex­pec­ta­tions pru­dent­ly. Re­cov­ery is pos­si­ble: but on­ly through dis­ci­plined co­or­di­na­tion, pro­duc­tiv­i­ty-en­hanc­ing re­forms, and pol­i­cy cred­i­bil­i­ty over the medi­um term. In­deed, at this point it is bet­ter to be rough­ly right than pre­cise­ly wrong.

Ex­tent of de­cline

Ho­sein said the new­ly elect­ed Gov­ern­ment faces a daunt­ing eco­nom­ic land­scape over the next five years, shaped by sharp de­clines across al­most every key eco­nom­ic and so­cial in­di­ca­tor from 2015 to 2024.

“Re­al GDP has fall­en to 82.5 per­cent (2015=100), with the en­er­gy sec­tor col­laps­ing even fur­ther to 66.4 per cent, and the non-en­er­gy sec­tor al­so shrink­ing to 88.3 per cent. Labour force par­tic­i­pa­tion has de­clined from 60.6 per cent to 54.8 per cent, and to­tal em­ploy­ment has dropped by near­ly 60,000 jobs. This, in turn, would have per­verse­ly af­fect­ed the coun­try’s non-en­er­gy fis­cal bal­ance as con­sid­er­able amounts of as­so­ci­at­ed fis­cal rev­enues would have been lost.”

He gave ad­di­tion­al da­ta which shows the econ­o­my “alarm­ing” de­cline.

“Man­u­fac­tur­ing em­ploy­ment fell by 12,000. Homi­cides surged from 410 to 624: pos­si­bly de­ter­ring do­mes­tic in­vest­ment and trig­ger­ing fi­nan­cial and hu­man cap­i­tal flight. Net of­fi­cial re­serves col­lapsed by al­most half, ex­ter­nal debt more than dou­bled, and the pub­lic debt-to-GDP ra­tio wors­ened from 58.4 per cent to an es­ti­mat­ed 80 per cent. In­fla­tion is en­trenched, with the food price in­dex alone ris­ing by near­ly 50 per cent, fur­ther hurt­ing house­hold pur­chas­ing pow­er, while food im­ports bal­looned from US$1.06 bil­lion to US$1.67 bil­lion (es­ti­mat­ed).”

He warned that fis­cal pres­sures are “equal­ly in­tense.”

“The non-en­er­gy fis­cal deficit widened sharply from TT$12.5 bil­lion in 2015 to TT$23.3 bil­lion in 2024 and cap­i­tal ex­pen­di­ture fell by about 40 per cent, with un­der­em­ploy­ment (num­ber of peo­ple work­ing less than 40 hours per week) wors­en­ing in agri­cul­ture, man­u­fac­tur­ing, and con­struc­tion. Mean­while, re­al agri­cul­ture out­put halved, non-trad­able ac­tiv­i­ties have ex­pand­ed as a share of to­tal out­put and em­ploy­ment, and tourist ar­rivals re­main be­low 2015 lev­els. Re­tail, food, and core in­fla­tion all re­flect ris­ing liv­ing costs, with bread, meat, veg­eta­bles and fruits par­tic­u­lar­ly af­fect­ed.”

The way for­ward

Ho­sein al­so said the new Gov­ern­ment will need to move de­ci­sive­ly on sev­er­al fronts to re­verse the coun­try’s eco­nom­ic stag­na­tion.

“A ma­jor pri­or­i­ty will be at­tract­ing sig­nif­i­cant­ly more tourists, both by air and sea. This re­quires ex­pand­ing the tourism prod­uct through cul­tur­al of­fer­ings like Car­ni­val, im­prov­ing na­tion­al se­cu­ri­ty, and ne­go­ti­at­ing bet­ter air­lift agree­ments. If ex­e­cut­ed well, such ef­forts can sharply in­crease for­eign ex­change earn­ings and stim­u­late em­ploy­ment across hos­pi­tal­i­ty, trans­port, and re­tail sec­tors.

“An­oth­er crit­i­cal area is boost­ing di­as­po­ra re­mit­tances: by de­vel­op­ing tai­lored di­as­po­ra bonds, fi­nan­cial in­stru­ments, and hous­ing schemes, and fos­ter­ing en­gage­ment through tar­get­ed out­reach, re­mit­tance flows could be con­sid­er­ably en­hanced. These funds can sup­port house­hold con­sump­tion and at the same time form the ba­sis for po­ten­tial cap­i­tal for in­vest­ment in MSMEs and re­al es­tate.”

He added that the Gov­ern­ment must al­so strength­en non-en­er­gy man­u­fac­tur­ing ex­ports in sec­tors such as plas­tics, glass, food and bev­er­age, and pa­per prod­ucts.

“This will re­quire ex­port de­vel­op­ment sup­port, lo­gis­tics im­prove­ments, and fis­cal in­cen­tives. Ex­pand­ing man­u­fac­tur­ing is es­sen­tial to di­ver­si­fy ex­port earn­ings, re­duce vul­ner­a­bil­i­ty to en­er­gy shocks, and grow the for­mal tax base as we try to low­er the ridicu­lous non en­er­gy fis­cal bal­ance.”

De­spite crit­i­cisms from sev­er­al quar­ters of the busi­ness com­mu­ni­ty of the way the e-Teck parks are man­aged, he be­lieves that these parks can be an­oth­er lever for growth.

“These zones must be up­grad­ed with bet­ter util­i­ties, dig­i­tal in­fra­struc­ture and stream­lined reg­u­la­to­ry process­es to at­tract more For­eign Di­rect In­vest­ment (FDI), par­tic­u­lar­ly in light man­u­fac­tur­ing, agro-pro­cess­ing, and tech-based ser­vices. It will take work and vi­sion, but can­not now be avoid­ed. E-Teck parks must on­ly be for forex earn­ing or forex sav­ing firms.”

Re­duc­ing the crime rate is an­oth­er im­por­tant step the new Gov­ern­ment must take, Ho­sein ad­vised.

“Cut­ting crime is foun­da­tion­al. A sharp re­duc­tion in homi­cides and vi­o­lent crime can pos­si­bly help to low­er the cost of do­ing busi­ness and raise do­mes­tic in­vestor con­fi­dence. Agro-pro­cess­ing of­fers an­oth­er op­por­tu­ni­ty. By con­nect­ing farm­ers to re­li­able proces­sors and val­ue-added mar­kets, the coun­try can re­duce food im­port costs and cre­ate more rur­al jobs. Tax rev­enues would al­so rise from in­creased for­mal sec­tor ac­tiv­i­ty in the agro-val­ue chain. Our non-en­er­gy fis­cal deficit must be ad­dressed.”

In­vest­ments in re­new­able en­er­gy will need to be ac­cel­er­at­ed. So­lar, wind, and green hy­dro­gen can re­duce de­pen­dence on im­port­ed re­fined fu­els and low­er en­er­gy costs, whilst at the same time re­leas­ing some gas for petro­chem­i­cal ex­ports.”

IMF da­ta

Ho­sein re­ferred to da­ta say­ing that the In­ter­na­tion­al Mon­e­tary Fund (IMF) pub­lish­es two ma­jor macro­eco­nom­ic data­bas­es each year, in April and Oc­to­ber.

“These re­leas­es are high­ly an­tic­i­pat­ed by econ­o­mists due to their rich and com­pre­hen­sive da­ta, par­tic­u­lar­ly the re­al GDP growth se­ries. Each data­base pro­vides his­tor­i­cal da­ta from 1980 and in­cludes six years of for­ward-look­ing pro­jec­tions be­yond the re­lease year. For in­stance, the April 2025 re­lease in­cludes re­al GDP da­ta from 1980 to 2030, with pro­jec­tions for the pe­ri­od 2025 to 2030. The April 2024 data­base ex­tends through 2029, and the April 2023 ver­sion through 2028. This al­lows for con­sis­tent com­par­isons across the April 2023, April 2024, and April 2025 datasets for the over­lap­ping years 2015 to 2027.”

He said by set­ting 2005 as the base year (2005 = 100), econ­o­mists con­struct three re­al GDP in­dices for T&T from each re­spec­tive World Eco­nom­ic Fo­rum (WEO) re­lease.

The pro­jec­tions for the econ­o­my have grown worse over the past few years.

“When plot­ted side by side, a clear pat­tern of down­ward re­vi­sion emerges. For ex­am­ple, the lev­el of re­al GDP pro­ject­ed for 2025 in the April 2024 data­base is 10.6 points low­er than in the April 2023 fore­cast. The April 2025 up­date shows a fur­ther de­te­ri­o­ra­tion, plac­ing 2025 re­al GDP at on­ly 120.5, which is 11.9 points be­low the April 2023 fore­cast for the same year. This is not just a re­duc­tion in growth ex­pec­ta­tions—it re­flects a marked down­grade in the ab­solute lev­el of eco­nom­ic out­put the IMF now an­tic­i­pates. The chart un­der­scores a sig­nif­i­cant and grow­ing pes­simism about T&T’s medi­um-term eco­nom­ic prospects.”