Senior Reporter
geisha.kowlessar@guardian.co.tt
T&T’s economy is exhibiting many of the characteristics associated with a recession, but economists remain divided on whether the country’s current economic difficulties fit the traditional definition of a recession or reflect a deeper structural slump driven by the prolonged decline of the energy sector.
Economist Dr Ronald Ramkissoon told Guardian Media yesterday that by the standard definition used internationally, this country is technically in a recession. “Using the standard definition of a recession, we are in a recession because the definition is two consecutive quarters of negative growth,” Ramkissoon explained.
His comments come as Opposition Leader Pennelope Beckles, in her 2027 Budget response in Parliament last Friday, accused the Government of putting the economy into recession.
Citing figures from the Central Statistical Office (CSO), the Central Bank and the Ministry of Finance’s Review of the Economy 2026, Beckles pointed to a 0.5 per cent economic contraction in 2025 and a projected 2.2 per cent decline in 2026.
“Unfortunately, the data is irrefutable: Trinidad and Tobago is in a recession, and no one else is to blame but this UNC Government,” Beckles said.
Yesterday, however, Ramkissoon noted that in a small economy such as T&T’s, GDP figures alone do not tell the full story, noting that a broader assessment should also consider unemployment, business closures, foreign exchange availability and the performance of key industries.
Ramkissoon pointed to the shutdown of several major petrochemical companies, rising unemployment and declining oil and gas production as evidence that economic conditions have deteriorated.
While energy prices remain relatively elevated, he said lower production volumes have translated into weaker economic activity and reduced foreign exchange earnings.
“There are a number of indicators that suggest the economy is undergoing what you might call recessionary conditions,” he said.
Economist Dr Jamelia Harris, meanwhile, said the available data strongly suggests the economy is contracting, although she stressed that only an official institution can formally declare a recession.
“Whether or not Trinidad and Tobago is in a recession has to be declared by an official authority, either the Central Bank, the CSO or the Ministry of Finance,” Harris said, adding that the accepted definition of a recession is two consecutive quarters of negative economic growth.
While official quarterly GDP figures have not been released, she noted that Government data points to year-on-year economic declines in the fourth quarter of 2025 and the first quarter of 2026.
“While the ministry has not provided exact quarterly data, they have given data that suggests the economy is contracting,” she said.
Harris agreed that several other indicators also point to weakening economic performance, such as job losses, a rise in unemployment and forecasts from both local and international institutions predicting further economic contraction.
She further noted that the Index of Quarterly Real Activity has recorded negative year-on-year changes for four consecutive quarters, the first time since the COVID-19 pandemic that such a trend has been accompanied by a slowdown in construction activity.
“Altogether, these indicators suggest that the economy is contracting, though a recession must be formally declared by the Government,” Harris reiterated.
While acknowledging positive indicators such as low inflation and improved import cover, Harris stressed that the nation remains heavily tethered to international commodity markets, underscoring the urgent need to tackle structural economic challenges.
Economist Dr Vanus James, however, believes the term recession fails to capture the true nature of T&T’s economic challenges.
“I wouldn’t call it a recession. I’d call it a big slump caused by the collapse of the energy sector,” James said.
According to James, recessions in developed economies are typically associated with temporary declines in consumer spending, investment and overall demand.
T&T’s situation, he argued, is fundamentally different because it is rooted in structural weaknesses and excessive dependence on a single sector.
He pointed to a 4.3 per cent decline in energy production and said the resulting fall in foreign exchange earnings has had ripple effects throughout the economy, noting that government borrowing has increased, pressure has mounted on public finances and economic activity has weakened across several sectors.
James also cited official figures showing that approximately 6,000 jobs were lost during the first six months of 2026.
“When that sector goes down, everything collapses. When it goes up, we are all happy. That is the kind of economy we have, booms and slumps,” he added.
While the three economists differ on terminology, they share concerns about the country’s heavy reliance on the energy sector and the need for economic diversification.
Ramkissoon expects growth to return in 2027, though he cautions that a meaningful recovery may not occur until late next year or even 2028.
James warned that even if new gas discoveries or access to Venezuelan gas provide a boost, the economy would remain vulnerable unless other export sectors are developed.
