What the Trinidad and Tobago economy looked like in 2025

Whitney Cupidore

The past year has been a period of profound transition for the economy of TT. As the global landscape shifts under the weight of trade policy volatility and geopolitical tensions, our domestic economy finds itself at a crossroads. While the energy sector remains the primary engine of national revenue, the persistent challenges of declining natural gas production and a strained foreign exchange (forex) market have underscored the urgent need for structural reform.

The TT Chamber of Industry and Commerce (TT Chamber) remains committed to advocating for an environment that fosters private sector-led growth. This review examines the performance of key sectors in 2025, the evolving business climate, and the strategic imperatives required to ensure long-term prosperity.

Global economic overview

The global economic environment in 2025 was shaped by heightened policy uncertainty and renewed trade tensions, particularly following tariff actions by the United States. In April 2025, the US administration announced a series of reciprocal tariffs targeting selected trading partners, including China and Canada. While subsequent negotiations led to partial rollbacks, delayed implementation dates and new trade arrangements in some cases, uncertainty persisted.

Growth in the TT economy

According to the Central Bank, there was a 2.1 per cent contraction in the first quarter of 2025 for the TT economy. This was due to contractions in the energy and non-energy sectors, at -4.8 per cent and -1.0 per cent, respectively.

Venezuela tensions …and its consequences

Tensions between Venezuela and TT escalated this year with Caracas suspending key energy cooperation agreements including those tied to natural gas projects such as the Dragon gas deal . The Dragon project, once seen as a major opportunity to access Venezuela’s offshore gas reserves and help reverse declining domestic supplies for TT's LNG and energy industries, has been jeopardised by geopolitical pressures, shifting US sanctions policy and Venezuela’s suspension of energy cooperation. These tensions have tangible consequences: the uncertainty around cross-border gas deals threatens future gas supply, undermines investor confidence in the energy sector, contributes to financial losses in related companies, and complicates long-term planning for one of TT’s most critical economic sectors.

Foreign exchange market

A key feature of the economic environment in 2025 was the continued foreign exchange shortage, which affected firms across mainly all sectors. Businesses faced unpredictable access to foreign currency, delayed payments to suppliers, rising input costs and disruptions to production schedules. Importantly, the constraint was mainly the availability of foreign exchange. The experience of 2025 reinforced a key lesson: an economy cannot grow efficiently when access to foreign exchange is rationed rather than market responsive. While the system remained administratively managed, the resulting inefficiencies reduced competitiveness and discouraged new investment.

Business outlook index

The TT Chamber in partnership with the Arthur Lok Jack Global School of Business, released in December 2025, a report on the Business Outlook Index Q4 2025. It revealed that 54 per cent of executives reported worsened financial performance over the preceding six months. Despite this, there was a distinct shift in sentiment as businesses look ahead: while confidence in the local economy remains largely negative for the six-month horizon, a majority of respondents expect their own organisation's financial outlook to improve within 12 months. This "light at the end of the tunnel" mentality suggests that business leaders view current hurdles, such as foreign exchange scarcity and high operating costs, as cyclical rather than permanent. Interestingly, while the Accommodation and Food Services sector initially showed a 75 per cent likelihood of hiring, a mid-quarter update following the 2026 Budget (which increased excise duties on alcohol and tobacco) saw a sharp pivot toward hiring freezes, illustrating how sensitive business confidence remains to shifting fiscal policy.

Revision of outlook by international ratings agencies

On September 25, 2025, S&P Global Ratings revised the outlook on TT to negative from stable. The negative outlook reflected their view that there is at least a one-in-three chance they could lower the ratings over the next six-24 months. The rationale behind the revision was that over time, TT’s fiscal and external buffers have gradually eroded, while long-term economic growth has remained subdued. Despite sustained policy efforts, progress in diversifying the economy has been limited across successive administrations, leaving the country highly exposed to fluctuations in global energy prices.

Approximately three months later, on December 12, 2025, Moody’s maintained the government’s long-term local and foreign currency issuer and senior unsecured ratings at Ba2. The affirmation reflected the country’s underlying credit strengths, including sizeable fiscal buffers such as the Heritage and Stabilisation Fund (HSF) and other cash-equivalent assets, together estimated at about 45 per cent of GDP, as well as expectations of improved oil and gas production by 2027. However, Moody’s revised the outlook to negative, citing near-term downside risks, particularly the decline in the Central Bank’s liquid foreign exchange reserves, which under Moody’s methodology do not include the HSF.

Ease of doing business

Operational challenges affecting the business sector persisted. Issues related to trade facilitation, port operations, and administrative processing continued to affect transaction costs and delivery timelines. Additionally, delays in tax administration processes, including VAT refunds, had implications for cash flow management for some firms, particularly exporters and VAT-intensive businesses.

Labour market

Labour market conditions in TT during 2025 reflected both resilience and persistent structural challenges. While official data pointed to a gradual improvement in employment levels, the demand for jobs continued to outpace available opportunities, particularly among young people and first-time entrants to the labour force. This imbalance was underscored in October 2025 when the government hosted a National Recruitment Drive, which reportedly attracted approximately 11,000 online applications on the first day alone, an indication of the scale of job-seeking activity and unmet employment demand within the economy. At the same time, employers across several sectors continued to report skills mismatches, vacancies in specialised roles, and difficulties sourcing appropriately trained labour. These dynamics highlight the need for closer alignment between education, training and labour market needs, alongside policies that support private sector expansion and sustainable job creation.

Business closures: The case of Nutrien

Nutrien, one of the world’s largest fertiliser producers, began a controlled shutdown of its nitrogen operations at the Point Lisas Industrial Estate earlier this year, citing port access restrictions imposed by the National Energy Corporation and an unreliable, uneconomic natural gas supply that has eroded profitability over time. This shutdown began on October 23, 2025 and may become prolonged as negotiations continue. The potential exit or long-term suspension of Nutrien’s Trinidad operations has important implications for the local economy: it threatens significant foreign exchange earnings from ammonia and urea exports, risks hundreds of jobs and affects related industries, and could undermine investor confidence in the energy and petrochemical sector which has been a cornerstone of TT’s economy while also disrupting local supply chains for inputs like carbon dioxide used by domestic manufacturers.

In conclusion, 2025 underscored the urgent need for decisive and coordinated economic reform in TT. The convergence of global uncertainty, energy sector vulnerabilities, foreign exchange constraints and business confidence challenges revealed the limits of the current economic model and reinforced the risks of continued reliance on the energy sector. Developments such as strained relations with Venezuela, the uncertainty surrounding future gas supply, labour market imbalances and the closure or suspension of major industrial operations highlighted the real economic costs of policy inertia and structural bottlenecks. The path forward must prioritise private sector-led expansion, productivity enhancement and long-term competitiveness to secure inclusive and durable economic progress.

Whitney Cupidore is the research officer at the TT Chamber of Industry and Commerce.