The Central Bank said yesterday that, according to data from the Central Statistical Office (CSO), real GDP contracted by 2.1 per cent (year-on-year) during the first quarter of 2025, with output declines in both the energy and non-energy sectors of 4.8 per cent and 1.0 per cent, respectively.
In its Monetary Police Announcement for September, the Central Bank said preliminary data from the Ministry of Energy and Energy Industries suggests mixed performances heading into the second quarter, with the production of natural gas falling by 2.1 per cent (year-on-year), while crude oil production registered a small increase of 0.3 per cent.
The petrochemical industry recorded expansions in ammonia (6.9 per cent) and urea (26.7 per cent), but there was a notable decline in methanol output (-28.1 per cent), according to the quarterly report from the Central Bank.
“Meanwhile, the trend of sluggish non-energy sector activity may have persisted during the second quarter of 2025. Indicators monitored by the Central Bank suggest that the continued positive performance of the distribution sector, albeit at a slower pace, may have been countered by tepid activity in the construction and manufacturing sectors,” said the financial regulator.
The Bank warned that while inflation is likely to remain low, growth prospects are fragile. Anticipated gains in energy from new natural gas fields may be offset by non-energy weakness, softer labour conditions, and adjustments in government programmes.
Domestic price pressures remain relatively contained. Headline inflation, as measured by the CSO’s Consumer Price Index, measured 1.4 per cent (year-on-year) in August 2025—unchanged from the rate three months earlier. Core inflation (which excludes food prices) rose marginally to 1.0 per cent while food price increases, influenced by a decline in vegetable prices, decelerated to 2.9 per cent. Building material prices and wholesale prices rose by 2.4 per cent and 1.2 per cent (year-on-year), respectively, in the second quarter of 2025.
“Liquidity in the financial system has tightened, slipping to $3.9 billion in September from $4.2 billion in August. Robust credit growth, Government financing operations, and Central Bank forex sales have contributed to the volatility. Private sector credit expanded 7.7 per cent in July, slower than 9.1 per cent in April. Business lending grew by 8.1 per cent, led by distribution, finance, and manufacturing, while consumer credit expanded 9.9 per cent. Real estate mortgage loans rose 6.3 per cent,” the Monetary Policy Announcement outlined.
On the external side, trade agreements could ease tariff uncertainty, while further US Fed cuts may narrow interest rate differentials in Trinidad and Tobago’s favour.
The Bank said the global slowdown driven by geopolitical tensions and trade policy risks is weighing on energy markets and on Trinidad and Tobago’s growth outlook. The International Monetary Fund, in its July update, projected global growth of 3.0 per cent in 2025, down from 3.3 per cent in 2024.
Crude oil prices averaged US$64.08 per barrel in August 2025, compared with US$75.55 a year earlier, while natural gas benchmarks also slipped.
At the same time, global monetary policy has tilted toward easing, with the US Federal Reserve cutting its policy rate to 4.00–4.25 per cent in September. This has narrowed the TT-US interest rate differential, as local short-term treasury yields move higher on tighter domestic liquidity.
“Taking all these factors into account, the MPC agreed to maintain the repo rate at 3.50 per cent. The Central Bank will continue to carefully examine and analyse international and domestic developments and prospects,” said the institution.
The next Monetary Policy Announcement is scheduled for December 31, 2025
