The Benchmark and the Outturn

For the second October running, Trinidad and Tobago's budget has told Parliament that its deficit sits "again within the international benchmark" of 3 per cent of GDP. Davendranath Tancoo, the Minister of Finance, presented Budget 2027 on 12 October. It sets revenue at TT$59.729 billion and expenditure at TT$63.368 billion for the fiscal year that began on 1 October, a deficit of TT$3.639 billion, which he put at 2.1 per cent of GDP. Revenue rests on oil at US$77.00 a barrel and gas at US$5.00 per MMBtu, against the US$73.25 and US$4.25 assumed for 2026. Last October the Budget 2026 statement used the same words for a deficit of TT$3.865 billion, or 2.17 per cent of GDP. This year's statement revises that year to a deficit of TT$7 billion, on revenue of TT$54.247 billion and expenditure of TT$61.247 billion.

The miss came from outside the energy account. The Review of the Economy 2026 records that Brent averaged US$90.60 a barrel from January to July 2026, well above the US$73.25 the budget assumed. Energy revenue beat the budget. The Review puts it at TT$17,103.5 million on provisional figures, against a budget of TT$15,233.1 million. Take energy out of current revenue in the Review's Appendix 22 and TT$36,592.7 million is left, against a budget of TT$39,422.5 million for non-energy revenue. That gap of TT$2,829.8 million was larger than the TT$1,870.4 million energy added. The Ministry expects real output to fall 2.2 per cent in calendar 2026, mostly from a 6.6 per cent drop in energy activity, with the non-energy economy down 0.7 per cent. Spending added to the gap. Against the original budget, current spending came in at TT$58,401.0 million instead of TT$55,131.5 million, while capital spending was TT$2,846.1 million against TT$4,100.0 million.

Borrowing abroad paid for most of the deficit. Of the TT$7,000.0 million requirement, TT$6,497.6 million was raised externally, net. In January and July the Government issued US$1.8 billion on international markets, gross, for refinancing as well as for the budget. The Review expects central government debt service of TT$21,063.1 million for fiscal 2026, up from TT$12,578.2 million, mainly because three large bonds matured. Interest accounts for TT$6,016.2 million, equal to 11.1 per cent of the year's revenue. The Minister told Parliament that TT$70 billion more falls due over the next five years. The country's credit rating bears on what that refinancing costs. S&P reaffirmed Trinidad and Tobago at BBB-, the lowest investment grade on its scale, on 22 July and kept a negative outlook, which the Review reports as at least a one-in-three possibility of a downgrade within twelve months. Moody's rates the country Ba2, below investment grade, and moved its outlook from negative to stable in June. The statement says the Ministry will "give serious consideration" to publishing an annual Fiscal Strategy Statement setting out medium-term fiscal objectives and the risks to them.

Unemployment was 5.4 per cent in the first quarter of 2026, up from 4.9 per cent a year earlier, according to the Review. Prices are barely moving: headline inflation was 0.6 per cent in July, the Central Bank reported on 30 September. For households the budget mostly gives. From 1 January 2027 the TT$250 monthly increase reaches 124,000 senior citizens, 13,637 public assistance recipients and 28,000 people on disability grants, at a cost the statement puts at TT$555 million. Pensioners get a higher personal allowance, up from TT$90,000 to TT$102,000 a year, worth about TT$11 million. Some measures take money back. Homes will pay a surcharge of 5 cents per kilowatt-hour on consumption above 3,000 kilowatt-hours in a billing period, a threshold the Minister said 90 per cent of households fall below. VAT will apply to digital services from non-resident suppliers from 1 March 2027. Selected zero-rated goods also become VAT-exempt. The statement stresses they will still carry no VAT at the point of sale, and presents the reform as a way to strengthen collection and ease the pressure of VAT refunds. Refunds fall because a seller of exempt goods cannot reclaim the VAT on its own inputs, so that cost stays with the seller or reaches the shelf price.

The budget also touches workers' entitlements. Employers who fail to pay National Insurance contributions for their staff face a maximum fine of TT$8,000 on summary conviction, up from TT$4,000, because non-payment compromises workers' contribution records and their access to benefits, the statement says. The statement counts more than 1,000 unresolved National Insurance appeals, from pensioners, people with disabilities and workers, and plans a review of the claims and appeals system with an international development partner. It also proposes to amend the law for workers who were unfairly denied benefits after the COVID-19 shutdowns. Members of the National Union of Government and Federated Workers get TT$510 million for arrears.

Most of the new revenue is to come from businesses. Four of the measures with a stated yield fall on business profits or on payments to non-residents, and they account for TT$910.1 million. The largest limits the use of losses carried forward to 75 per cent of chargeable profits from 1 January 2027, for TT$430 million, so a business coming out of loss-making years pays some tax sooner. Tighter withholding rules for management, technical and other services supplied remotely by non-residents are expected to raise TT$300 million. The Unemployment Levy on petroleum companies' profits rises from 5 to 8 per cent, for TT$155 million, and withholding tax on distributions to non-residents rises from 8 to 10 per cent, or from 3 to 5 per cent for parent companies, for TT$25.1 million. Importers rely on the banks for foreign exchange. From October 2025 to July 2026 authorised dealers sold US$4,613.8 million to the public and bought US$3,358.0 million from it, and the Central Bank sold them a further US$1,005.6 million, according to the Review. For savers and investors, the budget proposes Government Savings Bonds at fixed rates in Trinidad and Tobago and US dollars, which the statement presents as a domestic avenue for US dollar savings, and a retail programme selling government securities from TT$5,000.

For the rest of CARICOM, Trinidad and Tobago is mainly a seller. In the first nine months of fiscal 2026 it exported an estimated TT$7,336.0 million of goods to member states and bought TT$537.6 million from them, the Review reports. Jamaica, Guyana, Barbados, Grenada and Suriname were its main regional trading partners. Exports were about TT$896.7 million lower than a year earlier, with goods other than fuel down 13.4 per cent. The main exports included cereal preparations such as bread and biscuits, non-alcoholic beverages, liquefied propane and butane, natural gas and paper products. Alcoholic beverages are among the main goods it buys from the region. The budget cuts excise rates on alcoholic drinks by 25 per cent, for local makers and imports alike, and the customs duty on imported drinks moves from a charge by volume to one on value, but only for drinks without preferential treatment under Trinidad and Tobago's trade agreements. The budget also proposes to simplify the Foreign Investment Act's rules on foreign purchases of land and shares, including deals up to US$100,000, and to exempt CARICOM nationals from the Act's consideration rule.