Even as many T&T house­holds con­tin­ue to com­plain that it is be­com­ing hard­er to stretch their salaries to cov­er gro­cery bills and every­day ex­pens­es, Cen­tral Bank Gov­er­nor Lar­ry Howai says of­fi­cial da­ta con­tin­ues to show in­fla­tion re­mains un­der con­trol and the broad­er econ­o­my has re­mained sta­ble dur­ing the first half of 2026.

Ad­dress­ing con­cerns about ris­ing food prices, Howai in an in­ter­view with the Busi­ness Guardian at Am­cham T&T’s re­cent­ly con­clud­ed Tech Hub Is­lands Sum­mit (THIS) 2026, ac­knowl­edged that many con­sumers are re­port­ing high­er costs at su­per­mar­kets, par­tic­u­lar­ly for prod­ucts such as chick­en and oth­er house­hold sta­ples.

How­ev­er, he said those ex­pe­ri­ences have not yet trans­lat­ed in­to sig­nif­i­cant in­fla­tion­ary pres­sures in the of­fi­cial da­ta com­piled by the Cen­tral Sta­tis­ti­cal Of­fice (CSO).

“Yes, anec­do­tal­ly we hear that there are con­cerns around food prices, but it doesn’t show up in the da­ta that the CSO pub­lish­es,” the gov­er­nor said.

He cit­ed lat­est avail­able fig­ures from the CSO which put in­fla­tion at 0.3 per cent, “which is less than a half of one per cent, which is one of the low­est lev­els we’ve had.”

“We know that changes from month to month. But the of­fi­cial da­ta that we have sug­gests that the prices are rel­a­tive­ly well un­der con­trol. And even though there are some con­cerns around food prices, my rec­ol­lec­tion of that da­ta is that the food prices have been less than one per cent on av­er­age based on the bas­ket that the CSO us­es,” the gov­er­nor fur­ther ex­plained, not­ing that the bas­ket used by the CSO is in­tend­ed to re­flect prod­ucts pur­chased by or­di­nary con­sumers, though the agency is cur­rent­ly re­view­ing and up­dat­ing its method­ol­o­gy.

Econ­o­my holds steady dur­ing first half

While cost-of-liv­ing con­cerns re­main a chal­lenge for many house­holds, Howai said the Cen­tral Bank’s as­sess­ment of the econ­o­my over the last six months points to rel­a­tive sta­bil­i­ty.

“We think things have held up rea­son­ably well,” he said, not­ing that the coun­try’s fis­cal po­si­tion has re­mained sta­ble, in­fla­tion has stayed low and un­em­ploy­ment has edged low­er, pro­vid­ing enough sup­port for pol­i­cy­mak­ers to leave the re­po rate un­changed at 3.5 per cent.

The gov­er­nor ac­knowl­edged some slow­ing in eco­nom­ic ac­tiv­i­ty, par­tic­u­lar­ly in the non-en­er­gy sec­tor.

He al­so not­ed signs of mod­er­a­tion in parts of the en­er­gy sec­tor. How­ev­er, he said the Cen­tral Bank is not over­ly con­cerned giv­en the in­for­ma­tion cur­rent­ly avail­able and on­go­ing mon­i­tor­ing of de­vel­op­ments with­in the coun­try’s key in­dus­tries.

“Based on the da­ta that we have and the in­for­ma­tion which we re­ceive, we feel com­fort­able that things are ba­si­cal­ly sta­ble and steady,” he re­it­er­at­ed.

The de­ci­sion to main­tain in­ter­est rates comes as cen­tral banks around the world con­tin­ue to grap­ple with in­fla­tion­ary pres­sures, slow­ing growth and geopo­lit­i­cal un­cer­tain­ty.

In T&T’s case, pol­i­cy­mak­ers have opt­ed for sta­bil­i­ty, bal­anc­ing the need to sup­port eco­nom­ic ac­tiv­i­ty while pre­serv­ing for­eign ex­change re­serves and con­tain­ing fu­ture in­fla­tion risks.

In­fla­tion re­mains

biggest risk

De­spite its gen­er­al­ly pos­i­tive as­sess­ment of eco­nom­ic con­di­tions, the Cen­tral Bank con­tin­ues to iden­ti­fy in­fla­tion as the prin­ci­pal risk fac­ing the econ­o­my.

Howai said glob­al geopo­lit­i­cal ten­sions, sup­ply chain dis­rup­tions and ris­ing in­ter­na­tion­al prices could even­tu­al­ly trans­late in­to high­er costs for lo­cal con­sumers.

“If we see in­fla­tion go­ing above two per cent, we would want to take some kind of re­ac­tive mea­sures to deal with it,” he said.

At present, the bank sees no rea­son to al­ter its pol­i­cy stance.

Part of T&T’s pro­tec­tion against im­port­ed in­fla­tion comes from the rel­a­tive­ly sta­ble pric­ing of util­i­ties such as elec­tric­i­ty, wa­ter and nat­ur­al gas.

Un­like some coun­tries that ex­pe­ri­enced sig­nif­i­cant in­creas­es in en­er­gy costs, lo­cal con­sumers have ben­e­fit­ted from sta­ble util­i­ty prices.

The gov­er­nor al­so not­ed that busi­ness­es have been draw­ing down in­ven­to­ries pur­chased at low­er prices, which has helped de­lay the im­pact of high­er in­ter­na­tion­al costs.

How­ev­er, he warned that in­fla­tion­ary pres­sures could emerge once those in­ven­to­ries are re­placed with more ex­pen­sive im­ports.

Ma­jor en­er­gy de­vel­op­ments to

im­prove out­look

While the short-term out­look re­mains one of mod­est growth, Howai sig­nalled that the coun­try’s medi­um-term prospects could im­prove sig­nif­i­cant­ly.

He re­vealed that the Cen­tral Bank ex­pects an­nounce­ments from the en­er­gy sec­tor in the near fu­ture that could strength­en the coun­try’s eco­nom­ic out­look.

Al­though he did not spec­i­fy which projects were be­ing ref­er­enced, T&T has been pur­su­ing sev­er­al up­stream nat­ur­al gas de­vel­op­ments aimed at re­vers­ing years of de­clin­ing pro­duc­tion.

The gov­er­nor said the coun­try is like­ly to ex­pe­ri­ence a rel­a­tive­ly flat eco­nom­ic tra­jec­to­ry through 2027 be­fore see­ing stronger growth as new projects be­gin gen­er­at­ing rev­enue.

“For the next year or two, be­tween this year and in­to 2027, we’re not ex­pect­ing to see any ma­jor re­bound,” he said.

How­ev­er, con­di­tions are ex­pect­ed to im­prove once ma­jor gas de­vel­op­ments move in­to pro­duc­tion and be­come mon­e­tised.

Wind­fall rev­enue yet to ma­te­ri­alise

Howai al­so point­ed to ex­pect­ed in­creas­es in Gov­ern­ment rev­enue aris­ing from stronger oil and gas prices.

He ex­plained that tax­es paid by en­er­gy com­pa­nies typ­i­cal­ly re­flect earn­ings from pre­vi­ous pe­ri­ods. As a re­sult, the full im­pact of high­er com­mod­i­ty prices this year has not yet flowed in­to gov­ern­ment rev­enues.

“We ex­pect oil and gas prices to prob­a­bly soft­en a bit, based on the fact that we ex­pect the Mid­dle East­ern con­flict to be ad­dressed in some way. But we do still have some wind­fall earn­ings that we ex­pect to come in as a re­sult of what has hap­pened with oil and gas prices,” he said.

While un­able to pro­vide an es­ti­mate of the ad­di­tion­al rev­enue ex­pect­ed, the gov­er­nor not­ed that oil prices this year have been sig­nif­i­cant­ly high­er than those record­ed dur­ing the pre­vi­ous year.

Those high­er prices should even­tu­al­ly re­sult in in­creased tax col­lec­tions and for­eign ex­change earn­ings.

“Right now, apart from SPT for ex­am­ple, and roy­al­ties and so on, the oil prices would have been based on last year’s oil prices. This year’s oil prices are dif­fer­ent,” Howai said, adding “So we don’t have an ex­act num­ber for it, but we do know that oil prices are sig­nif­i­cant­ly high­er this year than they were last year. There­fore, we ex­pect to see in­creased earn­ings com­ing in to­wards the end of this year.”

Forex re­serves re­main com­fort­able

A crit­i­cal com­po­nent of the Cen­tral Bank’s out­look is the strength of the coun­try’s for­eign ex­change re­serve po­si­tion.

Howai said re­serves cur­rent­ly stand at ap­prox­i­mate­ly US$5 bil­lion, rep­re­sent­ing around six months of im­port cov­er.

That lev­el is broad­ly un­changed from a year ago and pro­vides what the Cen­tral Bank con­sid­ers a com­fort­able cush­ion against ex­ter­nal shocks.

“Our for­eign ex­change re­serves at this time are about the same lev­el as it was a year ago,” he said.

The gov­er­nor added that the bank’s strat­e­gy is to main­tain sta­bil­i­ty in both for­eign re­serves and in­ter­est rates over the next 12 to 18 months.

He said the in­sti­tu­tion ex­pects to pre­serve this po­si­tion through the end of 2027 be­fore an­tic­i­pat­ed en­er­gy-re­lat­ed rev­enues be­gin pro­vid­ing ad­di­tion­al sup­port.

No ma­jor FX changes or de­val­u­a­tion ex­pect­ed

On the for­eign ex­change front, Howai said the Cen­tral Bank in­tends to main­tain its cur­rent in­ter­ven­tion strat­e­gy.

The bank cur­rent­ly in­jects ap­prox­i­mate­ly US$1.2 bil­lion an­nu­al­ly in­to the mar­ket, while sup­port­ing state en­ter­pris­es, es­sen­tial im­ports and oth­er pro­grammes through an ad­di­tion­al US$1 bil­lion in for­eign ex­change al­lo­ca­tions.

Com­bined, about US$2.2 bil­lion en­ters the sys­tem each year.

The gov­er­nor said this ap­proach would re­main in place through at least 2027.

He al­so in­di­cat­ed that there is cur­rent­ly no in­di­ca­tion that gov­ern­ment is con­sid­er­ing a de­val­u­a­tion of the T&T dol­lar.

“No, at this stage, that’s some­thing that is man­aged by the gov­ern­ment. And I don’t see, the min­is­ter has giv­en no in­di­ca­tion that he ex­pects to see, to make any de­ci­sion like that any time at all, not even in the near fu­ture,” Howai said.

Point­ing to ex­am­ples such as Bar­ba­dos, which has main­tained a sta­ble ex­change rate for decades, he said small economies could suc­cess­ful­ly op­er­ate with sta­ble cur­ren­cy regimes.

For now, the Cen­tral Bank’s fo­cus re­mains on pre­serv­ing sta­bil­i­ty, keep­ing in­fla­tion un­der con­trol and po­si­tion­ing the coun­try to ben­e­fit from ex­pect­ed en­er­gy-sec­tor growth be­gin­ning in late 2027 and 2028.