By Sunil Lal
On 13 October 2025, Finance Minister Davendranath Tancoo presented a budget promising economic fairness for the fiscal year ending 30 September 2026. Its success should now be judged through three ordinary questions. Is it becoming easier to find work? Can businesses obtain the foreign exchange they need? Can the Government honour its commitments without borrowing substantially more than it planned?
These questions connect the national accounts to everyday life. A budget can provide welcome relief while leaving the country’s underlying difficulties largely intact. That, in my judgment, is where Trinidad and Tobago stands.
The Government deserves credit for benefits it actually delivered. Tancoo’s mid-year review of 15 June 2026 reported TT$224.8 million in wage-backpay advances following the promised 10% settlement with the Public Service Association. It also confirmed that the TT$1-per-litre reduction in Super gasoline remained in place. For recipients, those payments were meaningful. Workers should not have to apologise for wanting money they are owed.
Employment is the first test. The Central Bank’s announcement of 30 September 2026 reported unemployment of 5.4% in the first quarter, compared with 4.9% a year earlier. That is a deterioration of 0.5 percentage points. It is not evidence of an employment collapse. It is evidence that the promise of expanding opportunity had not yet translated into an improving national unemployment rate.
The Bank also reported that labour demand softened through July. Business lending growth slowed from 3.7% in March to 0.6% in July. Taken together, these indicators give me little confidence that a strong, broadly shared recovery is already underway.
The budget anticipated positive growth in 2026. The IMF’s assessment of 18 May projected only 0.8%. I cannot confirm this as an achieved full-year result. The distinction matters because a forecast cannot pay wages, and announcing investment cannot substitute for businesses actually producing and hiring.
Inflation provides some breathing room. The Central Bank reported July headline inflation of 0.6% and food inflation of 1.7%. These were below the August 2025 readings of 1.4% and 2.9% recorded in PwC’s budget commentary of 13 October 2025. That is welcome. But slower price increases leave earlier increases embedded in the grocery bill. For a household facing uncertain employment, price stability alone cannot restore security.
Foreign exchange is the second test, and it leads directly back to production. The budget promised improved access for productive businesses and greater earnings from energy. Yet the Energy Chamber’s analysis of 24 August 2026 put first-quarter gas production at approximately 2.427 billion cubic feet daily. Reaching the budget’s 2027 ambition of more than 3.2 billion requires an increase exceeding 0.773 billion.
That is a substantial distance, although the deadline has not passed. The Chamber explains the difficulty: new production must also replace declining output from existing fields. This is why celebrating each project announcement as though its entire output were an addition to national supply can mislead.
Oil offers encouragement. The Chamber’s 10 August report put first-quarter oil and condensate production at 54,209 barrels daily, up 4.7% year-on-year. Nevertheless, the reserve position shows no decisive strengthening. The IMF recorded US$5.369 billion at December 2025. Trading Economics’ Central Bank series, checked on 5 October 2026, recorded US$5.2931 billion for August. The decline was US$75.9 million, relatively small, but it provides no basis for declaring the foreign-exchange problem solved.
Reserves do not measure how long an importer waits to obtain currency. The next budget should require publication of allocation and waiting-time measures. Businesses need a system whose performance they can assess, alongside promises that future gas production will improve supply.
Public finances provide the third and clearest test. PwC recorded original revenue of TT$55.367 billion and spending of TT$59.232 billion. The resulting deficit was TT$3.865 billion. June’s review raised the projected deficit to approximately TT$7 billion, a deterioration of TT$3.135 billion.
The revenue programme included bank and insurance asset levies, landlord and electricity surcharges, higher National Insurance contributions and a proposed VAT replacement. The Government reported TT$224 million from three new revenue measures, while other reforms remained under implementation. My conclusion is that the programme had not developed quickly enough to support the revised spending plan. This is a failure of fiscal credibility, even where individual spending commitments are justified.
The IMF’s February statement put fiscal-2025 public-sector debt at 84.2% of GDP. That predates this budget’s implementation, but illustrates the limited room for further deterioration. The Heritage and Stabilisation Fund, valued in June’s review at US$6.60 billion on 4 June, provides protection. It should strengthen our ability to withstand shocks, not weaken the demand for disciplined budgeting.
I would make the next budget concentrate on getting viable businesses producing and hiring. Clear verified arrears, accelerate export approvals and publish transparent foreign-exchange allocation rules. The weakening labour indicators justify giving these practical measures priority over prestige construction without published costs and credible returns.
Honour wage agreements through a funded payment schedule. Reduce poorly justified state-enterprise transfers and target subsidies towards households that need them. Publish quarterly revenue, expenditure and arrears figures against the original plan.
Finally, use exceptional energy receipts to reduce borrowing and rebuild savings. The IMF’s May assessment warns about production disruptions and project delays. Require realistic delivery milestones before committing anticipated gas earnings. Hope belongs in a national recovery programme. Money that has not yet been earned should not be treated as money already available to spend.
