US-Venezuela tension affecting T&T economy, Central Bank warns

PORT OF SPAIN (CMC):

The Central Bank of Trinidad and Tobago (CBTT) says domestically, the fluid geopolitical tension between the United States and Venezuela is contributing to building economic uncertainty.

“Nonetheless, inflation is well contained, credit growth is still reasonable, and liquidity conditions have improved. However, economic growth is somewhat tentative,” the CBTT said in its Monetary Policy statement issued on Wednesday, the last working day in 2025.

It said that the positive effect of higher energy production in the second quarter of 2025, driven by two new natural gas fields, may be partially offset by a non-energy sector that is losing momentum across several sub-sectors.

“This suggests that the domestic economy is still in need of support to engender a sustained recovery,” the CBTT warned.

According to the policy statement, domestically, a boost to natural gas production in the second quarter of 2025 underpinned a resurgence in energy sector output 10.4 per cent year-on-year.

The CBTT said that domestic inflation has held firm at the lower end of single digits during the second half of 2025 and that headline inflation, as measured by the Central Statistical Office’s Consumer Price Index, measured 0.5 per cent in November 2025 compared with 1.5 per cent in June 2025.

It said core inflation, which excludes food prices, rose by 0.5 per cent while food inflation decelerated to 0.8 per cent, pulled down by lower international food prices and few weather related disruptions to domestic agricultural supplies. Building material price increases slowed to 1.5 per cent year-on-year during the third quarter of 2025 compared with 2.2 per cent the previous quarter.

The CBTT said that domestic financial conditions are finely balanced. It said system liquidity constraints have eased in recent months, despite continued government borrowing activity and notable upticks in interbank and repo market activity.