Trinidad and Tobago: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Trinidad and Tobago

International Monetary Fund. Western Hemisphere Dept.

doi:10.5089/9798400202582.002.A001

Author: International Monetary Fund. Western Hemisphere Dept.

Publication Date:: 10 Mar 2022

eISBN:: 9798400202582

Language:: English

Keywords:: IMF staff calculation; headline inflation; tax amnesty exercise; government education spending; return on assets; Global; authorities' view

Download PDF (4.8 MB)

1. Before the COVID-19 pandemic, Trinidad and Tobago was recovering from a prolonged recession. During 2016–19, the economy experienced a deep recession driven by energy supply and price shocks, which weakened domestic demand and adversely impacted fiscal and external positions. Real GDP growth was expected to turn positive in 2020 and pick up over the medium term, as energy projects came on stream and domestic demand recovery took hold.

Abstract

Context

1. Before the COVID-19 pandemic, Trinidad and Tobago was recovering from a prolonged recession. During 2016–19, the economy experienced a deep recession driven by energy supply and price shocks, which weakened domestic demand and adversely impacted fiscal and external positions. Real GDP growth was expected to turn positive in 2020 and pick up over the medium term, as energy projects came on stream and domestic demand recovery took hold.

2. COVID-19, domestic supply shocks in the energy sector, and weak global demand derailed the incipient recovery. Stringent COVID-19 containment measures severely impacted non-energy domestic activity (Box 1). Energy production declined significantly in 2020 and further in early 2021 due to unanticipated maintenance in some energy facilities and the closure of several petrochemical plants. Combined with weaker global demand and the drop in energy prices in 2020, these factors substantially lowered energy exports and fiscal revenues. Headline inflation fell while labor market conditions weakened considerably, causing an upsurge in retrenchments, temporary layoffs, and a reduction in working hours and labor force participation.

3. The government has made some progress in implementing key reforms. The incumbent People’s National Movement led by Prime Minister Keith Rowley won the 2020 general election and holds a second term until 2025. The government secured the approval of key legislation, including a new Insurance act to enhance the sector’s regulation and supervision framework; a Gambling sector law, which is expected to yield about 0.3 percent of GDP of additional taxes over the medium term; the Revenue Authority bill, which is expected to enhance revenue mobilization; and the Special Economic Zones (SEZs). In addition, the framework to establish a new property tax scheme is being implemented; the government, however, is facing challenges to ensure a critical mass of properties reporting proper valuation. The necessary reform on the Public Procurement is pending parliament approval (Annexes I, VII).

^{Box 1.}

COVID-19: Authorities’ Policy Responses

The authorities moved decisively to contain the pandemic quickly after the first case of COVID-19. They introduced a complete lockdown during March-April 2020, closed borders, and restricted certain economic activities. A gradual reopening began in May-June 2020 but was interrupted by partial restrictions re-introduced in mid-2021, to combat a second wave; and the borders remained closed until mid-July 2021. Vaccination has accelerated, reaching the level of regional peers (about 48 percent of total population is fully vaccinated as of January 2^nd, with the target of 70 percent by end-2022).

Timeline of COVID-19 Measures in Trinidad and Tobago (March 2020 – November 2021)

Sources: Local news and IMF staff complilations.

Timeline of COVID-19 Measures in Trinidad and Tobago (March 2020 – November 2021)

	Containment measures	Eased measures
1/30/2020	Inbound travel restrictions from China
02/27/20	Mandatory quarantine upon entry
03/16/20	School closing
03/16/20	Restrictions on gatherings
03/23/20	Ban on international travel
03/30/20	Lockdown
05/15/20		Gradual reopening began
07/20/20		Reopening of schools
08/17/20	New restrictions imposed
09/05/20		Nationals are allowed to return
12/21/20	Extented mandatory quarantine
02/08/21		Partially reopening of secondary schools
02/22/21		Vaccination begins
03/31/21		First shipment of vaccines arrives
04/29/21	Closing of shopping malls, restaurants, place ofworship, beauty salons
05/12/21		Second shipment of vaccines arrives
05/17/21	State of emergency imposed: nightly curfew and a ban on public gatherings
11/24/21		State of emergency lifted

Sources: Local news and IMF staff complilations.

Timeline of COVID-19 Measures in Trinidad and Tobago (March 2020 – November 2021)

	Containment measures	Eased measures
1/30/2020	Inbound travel restrictions from China
02/27/20	Mandatory quarantine upon entry
03/16/20	School closing
03/16/20	Restrictions on gatherings
03/23/20	Ban on international travel
03/30/20	Lockdown
05/15/20		Gradual reopening began
07/20/20		Reopening of schools
08/17/20	New restrictions imposed
09/05/20		Nationals are allowed to return
12/21/20	Extented mandatory quarantine
02/08/21		Partially reopening of secondary schools
02/22/21		Vaccination begins
03/31/21		First shipment of vaccines arrives
04/29/21	Closing of shopping malls, restaurants, place ofworship, beauty salons
05/12/21		Second shipment of vaccines arrives
05/17/21	State of emergency imposed: nightly curfew and a ban on public gatherings
11/24/21		State of emergency lifted

Sources: Local news and IMF staff complilations.

2020–21 Fiscal Responses to COVID-19

Sources: Trinidad and Tobago authorities and IMF staff calculations.

^{^1/}includes fuel relief grans (Maxi taxi) and cultural relief grants.

^{^2/}includes Trinidad Regional Health Authorities, Tobago Regional Health Authorities, Mask Distribution, Sanitization and protective equipment of police service.

Targeted fiscal support in 2020–21 amounted to about 4 percent of GDP. It included: salary relief to workers who were laid-off or faced reduced working hours due to COVID-19; VAT and income tax refunds to individuals and SMEs; liquidity support to individuals and small businesses via credit union loans; grants to hoteliers to upgrade their facilities; food, rental, and income support to low-income vulnerable groups; and import duty and VAT waivers on imports of certain medical and emergency supplies.

Monetary, FX, Financial Policy: COVID-19 Measures

The Central Bank of Trinidad and Tobago (CBTT) moved quickly to ensure adequate liquidity in the system and preserve financial stability. In March 2020, it reduced the policy rate and reserve requirement, and temporarily relaxed the regulatory treatment of restructured loans (for payment deferrals, rate reductions, and waivers of penalty charges) that were previously performing. Commercial banks lowered prime lending rates by 175 bps to 7½ percent and facilitated loan restructuring. Also, a special foreign exchange window through the EximBank was established to ensure the uninterrupted imports of food and pharmaceuticals.

Recent Developments

4. The economy experienced an unprecedented economic downturn in 2020–21. Real GDP contracted by 7.4 percent in 2020, reflecting a significant decline in the energy sector (12.2 percent), while the non-energy sector fell by 4.9 percent. In 2021, real GDP is estimated to have fallen further by about 1 percent due to the continued disruption to gas production, the closure of petrochemical plants, and a delayed economic reopening—caused by a prolonged second wave of COVID-19. Weak domestic demand lowered headline inflation to 0.8 percent in 2020, but the recent surge in international food prices pushed inflation up to 3.9 percent by October 2021. The unemployment rate increased to 5.1 percent in June-2020 (from 4.2 percent in March 2020).

5. The fiscal deficit and government debt rose sharply. The overall fiscal deficit widened to 11.6 percent of GDP in FY2020 (from 3.7 percent of GDP in FY2019), driven mostly by lower energy tax proceeds and outlays to mitigate the pandemic. The overall fiscal deficit in FY2021 remained elevated at 10.1 percent of GDP, mainly due to continued weak revenue performance, despite the authorities’ tax amnesty exercise. Fiscal financing was obtained by additional bond placements, withdrawals from the sovereign Heritage Stabilization Fund (HSF), and borrowing from international financial institutions. Central government debt rose sharply to 65.9 percent of GDP in FY2021 (45.4 percent of GDP in FY2019). Notwithstanding the increased financing needs, by end-September 2021, the country maintained large financial buffers, with the HSF assets valued at US$5.6 billion (26 percent of GDP) and sinking-fund assets at 4.1 percent of GDP at end-FY2021.

Summary of Fiscal Operations

Central Government Fiscal Operations

(Percent of GDP)

Sources: Trinidad and Tobago authorities and IMF staff calculations.

Central Government Fiscal Operations

(Percent of GDP)

			FY2019	FY2020	FY2021
Total Revenue and Grants			27.0	22.8	24.9
	Energy Sector		11.0	7.6	8.4
	Non-energy Sector		16.0	15.2	16.5
		Tax Revenue	12.5	12.3	13.8
		Non-tax Revenue	3.4	2.9	2.7
Total Expenditure			30.6	34.3	35.0
	Current		29.1	31.7	32.9
		Wages and salaries	5.7	6.2	6.3
		Goods and services	4.0	3.9	3.9
		Interest payments	3.1	3.4	3.9
		Transfers and subsidies	16.4	18.1	18.8
	Capital expenditure and net lending		1.5	2.7	2.1
Overall balance			-3.7	-11.6	-10.1
Central government debt			45.4	59.3	65.9

Sources: Trinidad and Tobago authorities and IMF staff calculations.

Central Government Fiscal Operations

(Percent of GDP)

			FY2019	FY2020	FY2021
Total Revenue and Grants			27.0	22.8	24.9
	Energy Sector		11.0	7.6	8.4
	Non-energy Sector		16.0	15.2	16.5
		Tax Revenue	12.5	12.3	13.8
		Non-tax Revenue	3.4	2.9	2.7
Total Expenditure			30.6	34.3	35.0
	Current		29.1	31.7	32.9
		Wages and salaries	5.7	6.2	6.3
		Goods and services	4.0	3.9	3.9
		Interest payments	3.1	3.4	3.9
		Transfers and subsidies	16.4	18.1	18.8
	Capital expenditure and net lending		1.5	2.7	2.1
Overall balance			-3.7	-11.6	-10.1
Central government debt			45.4	59.3	65.9

Sources: Trinidad and Tobago authorities and IMF staff calculations.

Source of Budget Financing

(Percent of GDP)

Sources: Trinidad and Tobago authorities and IMF staff calculations.

Source of Budget Financing

(Percent of GDP)

		FY2020	FY2021
Net domestic financing		2.3	5.9
	Domestic borrowing	7.7	10.0
	Debt repayments	-5.4	-4.1
Net external borrowing		4.5	-0.6
	International Bonds	2.3	0.0
	IDB	0.6	0.0
	CAF	1.8	0.0
	Export and Insurance Corporation	0.5	0.0
	Other	0.0	0.2
	Debt repayments	-0.7	-0.8
Others		4.8	4.8
	HSF	4.5	4.2
	Sale of assets	0.3	0.6
Total		11.6	10.1

Sources: Trinidad and Tobago authorities and IMF staff calculations.

Source of Budget Financing

(Percent of GDP)

		FY2020	FY2021
Net domestic financing		2.3	5.9
	Domestic borrowing	7.7	10.0
	Debt repayments	-5.4	-4.1
Net external borrowing		4.5	-0.6
	International Bonds	2.3	0.0
	IDB	0.6	0.0
	CAF	1.8	0.0
	Export and Insurance Corporation	0.5	0.0
	Other	0.0	0.2
	Debt repayments	-0.7	-0.8
Others		4.8	4.8
	HSF	4.5	4.2
	Sale of assets	0.3	0.6
Total		11.6	10.1

Sources: Trinidad and Tobago authorities and IMF staff calculations.

6. The external position in 2020 was weaker than implied by fundamentals and desirable policies. The current account balance further deteriorated in 2020 to 0.1 percent of GDP, reflecting a sharp contraction in energy exports, which exceeded a decline in imports. The current account gap is estimated at -3.4 percent, suggesting a currency over valuation of 11.6 percent, according to the EBA-Lite model (Annex IV). The government’s external borrowing and recent HSF withdrawal supported reserve levels in 2020 to stabilize at $6.95 billion, despite continued capital outflows. In 2021, the rebound in energy prices is estimated to have improved the current account balance to a surplus of about 11.2 percent of GDP. While FX shortages persist, the CBTT’s FX interventions have become more predictable in 2021. Reserves are expected to slightly decrease to US$6.8 billion by end-2021, notwithstanding the new SDR allocation.^¹

7. Despite the economic downturn, the financial sector remains stable. Through end-September 2021, banks remained well capitalized and liquid (with stable capital adequacy ratio (CAR) of 17.2 percent and liquid assets to total assets of 19.9 percent, compared to 17.1 and 22.4 percent at end-2020). Profitability declined moderately, driven by decreasing interest margins. Non-performing loans (NPLs) slightly increased but remained moderate at 3.2 percent in 2020 and 3.3 percent at end-September 2021, with loan-loss provisioning at 89.6 and 85.5 percent of impaired loans, respectively. Nevertheless, loan deferrals could have limited the impact on NPLs and may not yet fully reflect the pandemic effect on asset quality. Credit to private sector growth dropped in 2020, because of a deceleration in both consumer and business credit and remained weak through end-September 2021, despite the excess liquidity in the system and lower interest rates. The insurance sector has recovered from claims related to recent climate events in the region, while the long-awaited new insurance legislation expected to strengthen the supervisory regime was enacted in January 2021.

Outlook and Risks

8. The economy is projected to rebound strongly in 2022. The anticipated recovery in domestic demand and energy production— including from the new gas and oil fields—is expected to boost real GDP growth to 5.5 percent in 2022. The projections assume that the domestic spread of the pandemic would remain contained at moderate levels, and global activity would resume gradually. Over the medium term, the energy sector is projected to plateau, and real output growth to slow to potential of about 1 percent. With demand pressures contained, inflation in 2022 would remain at about 2.8 percent.

9. While the fiscal deficit is expected to narrow, public debt will remain high. Staff projects the fiscal deficit to decline to 7.5 percent of GDP in FY2022, reflecting a combination of a higher revenue mobilization and modest spending cuts. Over the medium term, the fiscal deficit is projected to gradually narrow and reach balance by FY2027. The MAC DSA shows that central Gross public debt would also gradually decline to 76.6 percent of GDP by FY2027 which would remain well above the government’s soft debt target of 65 percent of GDP over the projection horizon.^² Gross financing needs would remain at around 7 percent of GDP (Annex V).

10. The current account (CA) is projected to remain in surplus. The fast recovery in the energy sector would boostthe CA surplus to 18.6 percent of GDP in 2022 and would help stabilize the CA surplus over the medium term at average of 11.8 percent of GDP. External buffers are forecastto remain adequate—113 percent of ARA EM metric in 2027. Nonetheless, reserves are projected to decline over the medium term, averaging eight months of imports, as residents continue to invest abroad, and the FX intervention policy continues.

11. Risks are tilted to the downside. The primary source of risks relates to the evolution of the pandemic, as new virus strains and delays in the global vaccination rollout could derail the global recovery, adding more volatility to the energy sector, already subject to production and project delays. The lingering effects of the recession and regional exposures to natural disasters could exacerbate financial sector risks. Increased global greenhouse gas (GHG) mitigation efforts could reduce fossil fuel prices over the medium term. On the upside, stronger-than-projected global recovery could result in higher energy prices, improving the fiscal and external positions. Faster containment of the pandemic and implementation of key structural reforms could also boost non-energy sector growth.

Medium-Term Projections under the Baseline Scenario

Sources: Trinidad and Tobago authorities and IMF staff calculations.

^{^1/}In percent of non-energy GDP. For FY2022, the non-energy primary balance would be -19.8 percent of non-energy GDP once it includes the authorities’ intention to accelerate VAT refunds of 1.9 percent of non-energy GDP.

^{^2/}Excluding debt issued for sterilization, public bodies’ debt and borrowing from the CBTT.

^{^3/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

Medium-Term Projections under the Baseline Scenario

						Est.	Projections
		2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027
		(Annual percentage change, unless otherwise indicated)
Output and Inflation
Real GDP growth (in percent)		-27	-0.7	-0.2	-7.4	-1.0	5.5	2.6	3.5	1.1	1.0	1.0
Consumer Prices (eop)		1.3	1.0	0.4	0.8	2.4	3.2	2.3	2.0	1.9	1.9	2.0
		(In percent of GDP)
Central Government Finances
Overall fiscal balance		-10.8	-5.9	-3.7	-11.6	-10.1	-7.5	-4.1	-2.2	-1.3	-0.6	0.0
	Of which: non-energy balance	-17.0	-14.3	-14.7	-19.2	-18.5	-18.0	-15.1	-13.3	-12.1	-11.3	-10.7
Primary balance		-7.9	-3.0	-0.5	-8.2	-6.2	-4.1	0.0	1.9	2.7	3.3	3.8
	Of which: non-energy primary balance ^1/	-18.2	-15.1	-15.1	-19.3	-19.9	-21.8	-15.7	-12.7	-10.9	-9.7	-9.0
Central government debt ^2/		41.5	41.8	45.4	59.3	65.9	68.7	68.8	67.4	66.2	64.9	63.1
Public sector debt ^3/		59.2	58.4	61.9	79.6	87.2	88.4	87.0	84.0	81.8	79.5	76.6
External Sector
Current account balance		6.1	6.8	4.3	0.1	11.2	18.6	15.1	11.8	10.9	10.5	10.5
Gross official reserves (US$ millions)		8,370	7,575	6,929	6,954	6,803	5,925	5,762	5,570	5,325	5,095	5,025
In months of imports		10.5	9.9	10.4	10.9	10.0	8.8	8.4	8.0	7.6	7.3	7.1

Sources: Trinidad and Tobago authorities and IMF staff calculations.

^{^2/}Excluding debt issued for sterilization, public bodies’ debt and borrowing from the CBTT.

^{^3/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

Medium-Term Projections under the Baseline Scenario

						Est.	Projections
		2017	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027
		(Annual percentage change, unless otherwise indicated)
Output and Inflation
Real GDP growth (in percent)		-27	-0.7	-0.2	-7.4	-1.0	5.5	2.6	3.5	1.1	1.0	1.0
Consumer Prices (eop)		1.3	1.0	0.4	0.8	2.4	3.2	2.3	2.0	1.9	1.9	2.0
		(In percent of GDP)
Central Government Finances
Overall fiscal balance		-10.8	-5.9	-3.7	-11.6	-10.1	-7.5	-4.1	-2.2	-1.3	-0.6	0.0
	Of which: non-energy balance	-17.0	-14.3	-14.7	-19.2	-18.5	-18.0	-15.1	-13.3	-12.1	-11.3	-10.7
Primary balance		-7.9	-3.0	-0.5	-8.2	-6.2	-4.1	0.0	1.9	2.7	3.3	3.8
	Of which: non-energy primary balance ^1/	-18.2	-15.1	-15.1	-19.3	-19.9	-21.8	-15.7	-12.7	-10.9	-9.7	-9.0
Central government debt ^2/		41.5	41.8	45.4	59.3	65.9	68.7	68.8	67.4	66.2	64.9	63.1
Public sector debt ^3/		59.2	58.4	61.9	79.6	87.2	88.4	87.0	84.0	81.8	79.5	76.6
External Sector
Current account balance		6.1	6.8	4.3	0.1	11.2	18.6	15.1	11.8	10.9	10.5	10.5
Gross official reserves (US$ millions)		8,370	7,575	6,929	6,954	6,803	5,925	5,762	5,570	5,325	5,095	5,025
In months of imports		10.5	9.9	10.4	10.9	10.0	8.8	8.4	8.0	7.6	7.3	7.1

Sources: Trinidad and Tobago authorities and IMF staff calculations.

^{^2/}Excluding debt issued for sterilization, public bodies’ debt and borrowing from the CBTT.

^{^3/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

Authorities’ Views

12. The authorities broadly agreed with staff’s assessment of risks but were more sanguine about growth prospects. They anticipate a slightly stronger rebound in both energy and non-energy sectors, supported by upcoming energy projects and vaccine acceleration. Going forward, the authorities see the energy sector as the primary driver of the economy in the short term while expecting that the ambitious structural reforms agenda embedded in the “RoadMap for Trinidad and Tobago” would help diversify the economy, incentivize private investment, and accelerate activity in the non-energy sector in the medium term. They agree with moderate risks to this growth outlook, stemming from the pandemic disruptions, including to supply-chains, and unexpected shifts in energy production.

Policy Discussions

The discussions focused on adopting a policy mix in the near term that ensures enough fiscal policy support for efforts to preserve lives and livelihoods affected by COVID-19, while creating the conditions to safeguard fiscal and debt sustainability reinforce financial stability and boost potential growth over the medium term. Defeating the pandemic and firming up the recovery—including broadening of the vaccine rollout—is the immediate priority.

A. Near-Term Policies to Ensure a Sustained Recovery

13. Efforts to mitigate the impact of COVID-19 and support the economy are the immediate priority. The policy support measures—including the vaccine rollout—should continue to provide targeted support to the most vulnerable sectors to minimize economic and social scaring, while supporting the recovery. Given some remaining fiscal space, careful pacing will be essential to gradually withdraw support without disrupting the recovery and avoid premature tightening before the recovery is firmed up while preparing a contingency plan if downside risks materialize. Coordination between fiscal and monetary agencies supported by clear communication would ensure the private sector has time to adjust, and the most affected in society remain protected. Staff encourages the authorities to publish a COVID-related spending report, including information on the beneficial ownership of entities awarded COVID-related contracts, to strengthen transparency.

14. Considering the ongoing recovery and the need for gradually rebuilding buffers, the projected reduction in the FY2022 fiscal deficit is broadly appropriate. The authorities plan to keep nominal current expenditure at last year’s level while increasing capital expenditure to restore economic growth. The resulting spending envelope would continue to help mitigate the adverse impact of the pandemic and support the recovery, while implying some consolidation relative to the elevated 2020–21 levels as a share of GDP. On the revenue side, the authorities are projecting higher energy revenues, on the back of the anticipated higher energy production and prices. Moreover, while they anticipate collecting about 0.2 percent of GDP from implementing the property tax and the newly enacted gambling tax, non-energy revenue is expected to decline due to one-off higher VAT refunds (which are in line with staffs previous advice). For 2022, the authorities are encouraged to increase the execution rates of capital investment to further support activity, within the existing spending envelope.^³ Staff advised that should additional outlays be needed if downside risks materialize, these should be offset through spending reprioritization to avoid a higher deficit.

Central Government Accounts

(Percent of GDP)

Sources: Trinidad and Tobago authorities and IMF staff estimates.

^{^1/}In percent of non -energy sector GDP. For FY2022, the non-energy primary balance would be -19.8 percent of non-energy GDP once it includes the authorities’ intention to accelerate VAT refunds of 1.9 percent of non-energy GDP.

Central Government Accounts

(Percent of GDP)

			Preliminary FY2021	Approved budget FY2022	IMF staff projections FY2022
Total Revenue and Grants			24.9	27.4	25.8
	Energy		8.4	12.2	10.5
	Non-energy		16.5	15.1	15.3
		Tax revenue	13.8	12.7	12.8
		Non-tax revenue	2.7	2.4	2.4
Total Expenditure			35.0	33.9	33.3
	Current expenditure		32.9	31.2	31.2
		Wages and salaries	6.3	6.0	6.0
		Goods and services	3.9	3.6	3.6
		Interest payments	3.9	3.4	3.4
		Transfers and subsidies	18.8	18.2	18.2
	Capital expenditure		2.1	2.7	2.1
Overall balance			-10.1	-6.5	-7.5
Memorandum items:
	Primary balance		-6.2	-3.1	-4.1
	Non-energy primary balance ^1/		-19.9	-22.8	-21.8
	Central government debt		65.9	--	68.7

Sources: Trinidad and Tobago authorities and IMF staff estimates.

Central Government Accounts

(Percent of GDP)

			Preliminary FY2021	Approved budget FY2022	IMF staff projections FY2022
Total Revenue and Grants			24.9	27.4	25.8
	Energy		8.4	12.2	10.5
	Non-energy		16.5	15.1	15.3
		Tax revenue	13.8	12.7	12.8
		Non-tax revenue	2.7	2.4	2.4
Total Expenditure			35.0	33.9	33.3
	Current expenditure		32.9	31.2	31.2
		Wages and salaries	6.3	6.0	6.0
		Goods and services	3.9	3.6	3.6
		Interest payments	3.9	3.4	3.4
		Transfers and subsidies	18.8	18.2	18.2
	Capital expenditure		2.1	2.7	2.1
Overall balance			-10.1	-6.5	-7.5
Memorandum items:
	Primary balance		-6.2	-3.1	-4.1
	Non-energy primary balance ^1/		-19.9	-22.8	-21.8
	Central government debt		65.9	--	68.7

Sources: Trinidad and Tobago authorities and IMF staff estimates.

15. The recent monetary policy easing appropriately supported the economy. The cuts in the policy rate and reserve requirement and the temporary relaxation of the regulatory treatment of restructured loans usefully complemented fiscal support during the pandemic and kept liquidity in the system stable. Staff estimates that the current TTO-US policy rate differential is broadly consistent with the risk-adjusted UIP. Recent increase in inflation due to higher international food prices and shipping costs is expected to be transitory. While being considerate of the need to support the recovery, going forward, the CBTT is encouraged to remain data-dependent and be ready to alter its stance should inflationary pressures develop, capital outflows intensify, or the recovery falters.

Authorities’ Views

16. The authorities concurred with staff on the need to continue fighting the pandemic and supporting economic recovery. With the increase of vaccine supplies, they indicated that they managed to accelerate the vaccination pace relying on mass vaccination centers and effective organizational procedures. The authorities contemplate to scale down fiscal support measures, on the back of a successful vaccination campaign and reduced sanitary pressures, while continuing to support the most vulnerable. They agreed that the current monetary policy stance is appropriate and continue to closely monitor inflation developments.

B. Strengthening the Fiscal Framework

17. A medium-term fiscal consolidation plan is essential to reduce public debt and rebuild buffers. Under current policies, central government debt is expected to remain sustainable and the debt stabilizing primary balance is projected to be achieved by FY2024. However, given that energy-related income is volatile, and domestic energy resources are exhaustible, it is important to gradually reduce debt levels below the authorities’ soft public debt target of 65 percent of GDP over the medium term to rebuild fiscal policy space and ensure adequate savings for future generations. The adjustment needs to contain a mix of tax reforms and expenditure rationalization, while shifting the expenditure composition to improve the targeting of social programs, making room for productive investments, and addressing the challenges posed by climate change. The pace of consolidation should aim to provide space for growth-friendly expenditure and protect essential capital spending. Staff recommended a set of potential measures, some of which were identified in previous Fund technical assistance (TA) advice:

Improving revenue mobilization from tax policy and administration reforms. A comprehensive VAT reform to eliminate extensive zero-ratings, exemptions (on both imports and domestic production to avoid differential treatment), and selective tax incentives could yield substantial revenues. Addressing weaknesses in tax compliance and administration, in line with previous technical assistance recommendations, remains a priority. These include establishing a reliable taxpayer register; auditing the stock of VAT refunds (estimated at 5.2 percent of GDP); and improving filing, payments, and arrears management.
Rationalizing existing subsidies on fuel, electricity, and water, which disproportionately benefit the well-off population and encourage over-consumption. The authorities intend to liberalize fuel prices, starting January 2022, and electricity and water prices, following the recommendations of the relevant commission, while introducing a cash-transfer scheme to low-income and vulnerable groups. Staff supports the authorities’ planned subsidy reform and emphasized the need to strengthen the social safety net.
Streamlining transfers to SOEs and other public bodies. The authorities intend to reform the electricity (T&TEC) and water (WASA) public utilities and other SOEs to enhance competition and effectively manage public resources. In staff’s views, there is a need to further define the reform process within a specific timeframe to enable the SOEs to become economically efficient, more accountable, and transparent. Moreover, advancing SOE reforms would help contain and mitigate fiscal risks stemming from these entities.^⁴
Enhancing public spending efficiency. Poor education and healthcare outcomes relative to spending levels show the need to improve efficiency which would create space for spending on infrastructure. In this regard, staff encourages speedy adoption of the Public Procurement Act, including the publication of information on the beneficial ownership of public contracts to increase transparency and accountability in government procurement.

18. Adopting a medium-term fiscal framework (MTFF) with clear objectives would enhance policy credibility. Staff welcomes the authorities’ efforts to formulate medium-term fiscal projections. The next step should be to develop and implement a robust MTFF. Such a framework would help: (i) strengthen multi-year fiscal discipline, avoid procyclicality, and identify the impact of new policies; (ii) facilitate the setting of medium-term fiscal measures to achieve the objectives; and (iii) mitigate fiscal risks, including SOE-related risks, by providing early warning signals about fiscal sustainability. In this regard, broadening fiscal data coverage beyond the central government, including state owned enterprises, would ensure a more comprehensive assessment of the government’s impact on the economy and any attendant risks.

19. Establishing an appropriate fiscal anchor could strengthen the MTFF. The lack of a robust policy anchor has resulted in procyclical fiscal policy that follows energy price swings. Adopting a formal fiscal rule that also considers the performance of SOEs would support the accumulation of adequate financial buffers during periods of high energy prices and delink expenditure from energy revenue volatility while ensuring that funds transfers in and out of the HSF are integrated with the MTFF. Given the country’s volatile and exhaustible energy income, having an operational multiyear fiscal target based on the non-energy primary balance to guide the government plans would help to reverse the rise of public debt and rebuild fiscal space. In this regard, the Fund stands ready to enhance capacity in this area through tailored-TA to help determine the appropriate anchor to support fiscal sustainability.

20. Developing a sound debt management framework is critical. The authorities have mainly relied on the domestic market to meet their financing needs. While there appears to be no evidence of private sector crowding-out, financing persistent deficits in this way would further increase financial sector’s sovereign exposures. Furthermore, modernizing the debt market infrastructure to enhance its efficiency and effectiveness would provide a wide range of funding opportunities to the government and the private sector. Staff continues to propose adopting an integrated asset-liability management strategy to guide financing decisions, including the desired composition of the government debt portfolio, and to help assess the implications of alternative financing options.

Authorities’ Views

21. The authorities concurred with the need for fiscal consolidation to bring debt back on a downward trajectory. They emphasized that they have started to put in place policies to reduce public debt levels and were confident that they are on course to achieve a primary surplus by FY2023, stemming mainly from a combination of revenue-enhancement measures and expenditure restraint. The authorities took note of staff’s additional proposed revenue and expenditure measures. The Parliament passed the Gambling (Gaming and Betting) Control Bill in 2021 and the authorities would determine the membership of the first Board soon. Moreover, they are advancing initiatives to establish the Revenue Authority and implement a property tax. On the expenditure side, they are rationalizing transfers and subsidies, including to SOEs while increasing capital spending.

22. The authorities recognized the importance of strengthening the fiscal framework. They indicated that they have made good progress in formulating medium-term fiscal projections in line with the IMF 2018 TA recommendations. They are also in the process of developing a debt management strategy, with TA support from the Caribbean Technical Assistance Center (CARTAC). The authorities recognized the merits in exploring the case for adequate fiscal rules and welcomed IMF staffs proposal to provide TA.

C. Modernizing Monetary and Exchange Rate Policy

23. Given the authorities’ preference for a stable exchange rate, persistent FX shortages highlight the need to reform the FX market infrastructure.^⁵ While the authorities’ commitment to maintaining a stable peg seems well understood by market participants, the mechanisms to ensure a well-functioning FX market could be improved to reduce uncertainty. A proliferation of special-purpose facilities at the EximBank to prioritize FX access to manufacturers, importers of necessities—including SOEs—have produced a hybrid exchange rate system that is prone to inefficiencies.^⁶ Staff encourages the authorities to regularly review the current system to ensure its appropriateness and recommends modernizing FX and money markets infrastructure to replace the special purpose windows at the EximBank to reduce those inefficiencies to support the sustainability of the existing arrangement. Staff also encourages the authorities to eliminate exchange restrictions and multiple currency practices in a planned manner while providing sufficient FX to meet demand for all current international transactions.^⁷ Moreover, staffs recommended fiscal strategy to rebuild buffers discussed above (1117) will facilitate external adjustment and help prevent reserves from falling below the adequacy range over the medium term when energy sector revenues decrease. Looking to the future, exchange rate flexibility, if properly utilized, would reduce the need for fiscal tightening to achieve external balance and create room for countercyclical monetary policy.

Authorities’ Views

24. The authorities recognized the persistent imbalances in the FX market and are taking steps to address it. They noted that the recent rebound in energy production and prices allowed for some improved FX supply and expected even higher FX supply from the energy sector over the medium term, owing to the start-up of new energy projects. They also pointed out that they monitor the FX market regularly and take appropriate actions when needed. In this regard, three new special-purpose windows for FX have been established in recent years within the EximBank, and the CBTT continues to intervene on a bi-monthly basis. The authorities welcomed staffs TA offer to assist in modernizing the FX market infrastructure.

D. Reinforcing Financial Stability and Resilience

25. The financial system has withstood the COVID and energy shocks well. Latest data on financial soundness indicators (FSIs) for banks and insurance sector suggest that risks from the pandemic have been contained (Figure 6) and are broadly consistent with the findings of the 2020 FSAP’s stress-tests. Institutions maintained healthy capital and liquidity buffers while contending with declining asset quality and profitability. Banks’average CAR declined but remains adequate and exceeds the new regulatory minimum of 10 percent, set according to Basel II. Liquidity remains adequate, but risks could arise from interconnectedness in the system. The loan moratorium helped to contain NPLs, though loss provisioning increased.

26. Given financial vulnerabilities, careful monitoring of the financial system is essential to detect signs of additional financial stresses. The financial system faces a rise in household debt, high sovereign exposure, and natural disaster risk (including climate-related shocks). As the loan moratoria, which ended on September 30, 2021, may have prevented some loans from becoming delinquent, the CBTT is encouraged to conduct timely and forward-looking assessments of banks’ asset quality and raise provisioning, if necessary.

27. Staff welcomes the development of Fintech policies to improve efficiency and financial inclusion. The authorities recently launched the E-Money order, created the Fintech Innovation Hub, and are building capacity in digital payments. These policy innovations should be supported by the appropriate physical infrastructure (including mobile and internet connectivity) and promotion of their inclusive access, and the necessary updates of its supervisory and regulatory framework to safeguard against new financial-stability and cybersecurity risks that may arise. With the right measures, fintech would further enhance domestic financial development, foster financial inclusion, lower intermediation costs, and diversify financial products.

28. Further progress in strengthening the regulatory and supervisory framework is needed to enhance the financial system’s resilience. The CBTT began addressing the 2020 FSAP recommendations (Annex III). It is finalizing phase 2 of the Basel ll/lll implementation plan, a proposal to develop a comprehensive payment system, and corporate governance guidelines. The CBTT is encouraged to address remaining recommendations, including (i) upgrading the regulatory framework in line with best international practice; (ii) strengthening supervisory independence, resources, and regulatory powers; (iii) overhauling non-bank supervision (including assigning an independent supervisor with sufficient powers for credit unions); (iv) adopting a strong macroprudential framework and prudential policies; and (v) developing a crisis management framework with a tool-set to effectively deal with distressed financial institutions without relying on government bailouts.

29. Staff welcomes the progress in strengthening the AML/CFT framework and urges addressing deficiencies in tax transparency and exchange of information. The removal of Trinidad and Tobago from the Financial Action Task Force (FATF) monitoring list in February 2020 is commendable. The authorities are encouraged to make further efforts to strengthen the AML/CFT framework, employing measures to increase the number of entities that register beneficial ownership information, finalizing amendments to the public procurement act, and adopting risk-based AML/CFT supervision. Expeditious resolution of issues related to the EU blacklist and the OECD’s Global Forum requirements on tax transparency and exchange of information is crucial to prevent the loss of correspondent banking relationships (Annex VII).

Authorities’ Views

30. The authorities emphasized that the financial system remains resilient and are committed to advancing regulatory and supervisory reforms. They agreed that some vulnerabilities exist but indicated that they continue to be vigilant and are closely monitoring developments. The CBTT acknowledged that the loan deferral program may have masked a rise in NPLs, but proactive measures taken by banks to ramp up provisioning and the economic reopening would help mitigate any potential deterioration in asset quality. They noted that the adoption of some elements of the Basel ll/lll framework was delayed due to the pandemic.

31. The authorities are pushing ahead with further enhancing the financial integrity framework. The CBTT implemented a risk-based AML supervision framework in early 2020 and introduced the AML Self-Assessment Questionnaire. Moreover, they are currently working with the World Bank to conduct a national AML/CFT risk assessment. The authorities highlighted that they have been discussing with the EU and the Global Forum actions to remove Trinidad and Tobago as a non-cooperative jurisdiction for tax matters and are finalizing an action plan to comply with the EU’s tax governance criteria.

E. Promoting Inclusive and Sustainable Growth

32. Given the economy’s heavy dependence on fossil fuels, policies to develop renewable energy and the non-energy sector are critical. The authorities’ “Vision 2030” and “The Roadmap” plan present a comprehensive strategic policy framework that identifies policy priorities to support medium-term inclusive growth, reduce external imbalances, and enhance resilience. They aim to improve the competitiveness, ease the doing of business, incentivize investment, and promote tourism. Such plan should be advanced expeditiously while exploring options for diversification within the energy sector (e.g., renewable energy) would help reduce vulnerability to climate mitigation policies.

33. Comprehensive structural reforms to improve the business environment are critical to support the non-energy sector. Reforms to reduce administrative burden; improve education and vocational training to help address skills mismatches and boost productivity; and stimulate entrepreneurship will be important to enhance non-energy sector growth. This would limit the risk of any longer-term output losses from COVID-19 and create greater opportunities for inclusive growth. In this regard, staff welcomes the authorities’ recent initiative to support SMEs and their efforts to enhance the transition to the digital economy to increase productivity, tax collection, and formality. Clearing VAT refund arrears and remain current is also important since such delays may affect liquidity position of businesses and their tax compliance.

34. Efforts to build a climate-resilient economy should be intensified. In addition to flooding and droughts, the country is prone to natural disasters. Having recently signed the Paris Agreement, Trinidad and Tobago committed to reducing GHG emissions by 15 percent from power generation, transportation, and industrial operations. They plan to increase the renewable energy component of power generation and started to implement a fuel-switching program in the transportation sector to meet the target. Climate change warrants conducting a comprehensive environmental risk assessment of the financial sector. Upgrading climate-resilient infrastructure and the regulatory framework for green financing and renewable energy are warranted (Annex VI).

Authorities’ Views

35. The authorities broadly agreed with the key structural priorities. They would seek to continue with SOE reform following the 2018 restructuring of Petrotrin (the state-owned oil company) and are committed to pursuing broad-ranging reform agenda focused on improving the country’s competitiveness, and doing business environment, including modernizing the current Free Zone regime, introducing e-Government and digital economy, and promoting the tourism sector. The authorities pointed out that the establishment of the new revenue authority seeks to facilitate trade by reducing transaction costs. Moreover, comprehensive review of the oil and gas taxation regime will soon be conducted to ensure that the domestic hydrocarbon sector remains internationally competitive. The authorities reiterated their strong commitment to reducing emissions and developing solar energy, calling for a delicate balancing act and recognizing natural gas and ammonia as cleaner carburants.

F. Improving Data Adequacy

36. Staff welcomes progress in improving data quality and timeliness and calls for further actions to enhance national statistics. The launch of the National Summary Data Page (NSDP) under the e-GDDS—an important data transparency framework—in October 2021 is commendable. Although data remain adequate for surveillance, further progress is needed, particularly by reducing publication gaps for the labor market and household surveys and improving the reporting of capital flows data (see Informational Annex).

Authorities’ Views

37. The authorities stressed their commitment to improving data compilation and dissemination and welcome further TA from the IMF. They emphasized that the launch of NSDP would help enhance data transparency by allowing easy access to published data in a timely manner. They indicated that they are advancing efforts to create the National Statistics Institute. They noted that the pandemic complicated the data collection; they plan to incorporate remote interviews and update census, household, and labor surveys in 2022. The authorities welcome IMF TAto enhance statistics and called for continuing collaboration.

Staff Appraisal

38. The authorities acted decisively to contain the pandemic. Containment and health measures to fight the virus limited the number of cases and fatalities despite waves of infections. The multi-pronged fiscal, monetary, and financial measures helped protect livelihoods and pave the way for a strong recovery. The economy is expected to rebound strongly, supported by the continued policy support and the anticipated recovery in energy production, but risks to the outlook remain.

39. The immediate priorities are to accelerate vaccinations and support the economic recovery. The policy support measures—including vaccine rollout—should continue providing targeted support to the most vulnerable sectors to minimize economic and social scarring until the economic recovery is well underway. The authorities are encouraged to publish a COVID-related spending report and prepare a contingency plan if downside risks materialize. Concurrently, careful pacing and policy coordination will be essential to withdraw support gradually and avoid undermining the recovery.

40. The current fiscal and monetary policy stances are appropriate. The availability of some fiscal space allows continued temporary high spending to mitigate the effects of the pandemic and restore economic growth in the context of gradual deficit reduction. The current accommodative monetary policy stance is supporting the recovery but the CBTT should be ready to alter its stance should inflationary pressures develop, capital outflows intensify, or the recovery falters.

41. Once the recovery firms up, a growth-friendly and inclusive medium-term fiscal adjustment plan is essential to reduce public debt. The adjustment needs to contain a mix of tax reforms and expenditure rationalization. In particular: implementing tax policy reforms and strengthening tax administration to enhance revenue mobilization; streamlining transfers to SOEs; improving public spending efficiency; reforming public procurement; publishing information on the beneficial ownership of public contracts; and phasing out subsidies, while protecting vulnerable groups.

42. Strengthening the fiscal framework would help guide fiscal policy. Adopting a well-designed medium-term fiscal framework (MTFF) would strengthen multi-year fiscal discipline, avoid procyclicality, and mitigate risks. Aformal fiscal rule that focusses on the non-energy primary balance could be considered to ensure fiscal sustainability. Developing a sound debt management strategy would guide financing decisions. Broadening the coverage of complete fiscal data beyond the central government would ensure a comprehensive assessment of the government’s impact on the economy and any attendant risks.

43. Structural changes in the FX markets are necessary to support the exchange rate regime and the authorities are encouraged to eliminate exchange restrictions and multiple currency practices. Modernizing FX and money market infrastructure is critical to reduce inefficiencies and imbalances to support the sustainability of the existing arrangement. Looking to the future, greater exchange rate flexibility would reduce the need for fiscal policy adjustments to restore external balance and create room for more countercyclical monetary policy. The authorities are encouraged to eliminate exchange restrictions and multiple currency practices in a planned manner while providing sufficient FXto meet demand for all current international transactions.

44. The financial sector remains stable but should be monitored closely while advancing the regulatory and supervisory reforms. Banks are well-capitalized and liquid, but the loan moratoria program could have masked weakness in asset quality. The CBTT is encouraged to conduct timely and forward-looking assessments of banks’ asset quality and encourage increases in provisioning, if necessary. Efforts to strengthen the regulatory and supervisory framework should continue to enhance the financial system’s resilience.

45. Further actions are needed to strengthen the AML/CFT framework. The country’s removal from the FATF monitoring list in February 2020 is commendable. The authorities are encouraged to make further efforts to strengthen the AML/CFT framework and make similar progress on resolving issues related to the EU and the OECD blacklists.

46. Comprehensive structural reforms are key to promoting the non-energy sector. Policies to develop the non-energy sector are critical to support medium-term inclusive growth and enhance resilience. Thus, reforms to remove obstacles to doing business, improve education and vocational training to help address skills mismatches and boost productivity, and stimulate entrepreneurship will be important.

47. Building a climate-resilient economy is necessary. The plan to reduce GHG emissions and to increase the renewable energy usage should be advanced to support sustainable development, including the decoupling of emissions and economic growth. Upgrading climate-resilient infrastructure and the regulatory framework for green financing and renewable energy are warranted.

48. Bridging data gaps would make policy decisions more effective. The authorities are encouraged to reduce publication gaps and overhaul national statistics, emphasizing national accounts, labor market, household survey, and capital flows, as well as adhering to the standards of the National Summary Data Page (NSDP) under the IMF’s e-GDDS.

49. It is recommended that the next Article IV consultation be held on the standard 12-month cycle.

^{Table 1.}

Trinidad and Tobago: Selected Economic Indicators

Sources: Trinidad and Tobago authorities; UN Human Development Report; WEO; and IMF staff estimates and projections.

^{^1/}Includes VAT and Financial Intermediation Services Indirectly Measured (FISIM).

^{^2/}Data refer to fiscal year, for example 2019 covers FY2019 (October 2018-September 2019).

^{^3/}Defined as non-energy revenue minus expenditure (net of interest payments) of the central government, as a share of non-energy GDP.

^{^4/}Excluding debt issued for sterilization, public bodies’ debt, and borrowing from the CBTT.

^{^5/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

^{Table 1.}

Trinidad and Tobago: Selected Economic Indicators

GDP per capita (U.S. dollars, 2020)	15,265	Adult literacy rate (2010)	99
Population (millions, 2020)	1.40	Unemployment rate (Q2 2020)	5.2
Life expectancy at birth (years, 2019)	73.5	Human Development Index (2019, of 189 economies)	67
Under 5 mortality rate (per thousand, 2019)	17.5

								Projections
			2017	2018	2019	2020	Est. 2021	2022	2023	2024	2025	2026	2027
			(Annual percentage change, unless otherwise indicated)
National income and prices
Real GDP			-2.7	-0.7	-0.2	-7.4	-1.0	5.5	2.6	3.5	1.1	1.0	1.0
	Energy		-0.2	-3.4	-4.0	-12.2	-1.1	12.9	4.0	5.9	0.3	0.0	0.0
	Non-energy ^1/		-4.0	0.8	1.9	-4.9	-0.9	2.0	1.9	2.2	1.5	1.5	1.5
GDP deflator			8.2	3.4	0.2	-3.4	1.6	2.8	2.7	2.1	2.0	1.9	2.0
CPI inflation (end-of-period)			1.3	1.0	0.4	0.8	2.4	3.2	2.3	2.0	1.9	1.9	2.0
CPI inflation (period average)			1.9	1.0	1.0	0.6	1.6	2.8	2.7	2.1	2.0	1.9	2.0
Unemployment rate			4.4	3.5	4.3	4.7	5.4	...	...	...	...	...	...
Real effective exchange rate			-2.6	-1.3	-0.7	-1.5	-1.3	...	...	...	...	...	...
			(In percent of fiscal year GDP)
Central government finances^2/
Central government primary balance			-7.9	-3.0	-0.5	-8.2	-6.2	-4.1	0.0	1.9	2.7	3.3	3.8
	Of which: non-energy primary balance ^3/		-18.2	-15.1	-15.1	-19.3	-19.9	-21.8	-15.7	-12.7	-10.9	-9.7	-9.0
Central government overall balance			-10.8	-5.9	-3.7	-11.6	-10.1	-7.5	-4.1	-2.2	-1.3	-0.6	0.0
	Budgetary revenue		21.2	24.5	27.0	22.8	24.9	25.8	27.5	28.2	28.3	28.2	28.3
		Energy	6.2	8.3	11.0	7.6	8.4	10.5	11.0	11.1	10.9	10.6	10.7
		Non-energy	15.0	16.2	16.0	15.2	16.5	15.3	16.5	17.1	17.4	17.6	17.6
	Budgetary expenditure		32.0	30.5	30.6	34.3	35.0	33.3	31.6	30.4	29.5	28.8	28.3
		Of which: current expenditure	29.8	28.3	29.1	31.7	32.9	31.2	29.5	28.3	27.4	26.7	26.2
		Of which: interest expenditure	2.9	3.0	3.1	3.4	3.9	3.4	4.1	4.0	4.0	3.9	3.8
		Of which: capital expenditure	2.2	2.2	2.3	2.7	2.1	2.1	2.1	2.1	2.1	2.1	2.1
Central government debt ^4/			41.5	41.8	45.4	59.3	65.9	68.7	68.8	67.4	66.2	64.9	63.1
Public sector debt ^5/			59.2	58.4	61.9	79.6	87.2	88.4	87.0	84.0	81.8	79.5	76.6
Heritage and Stabilization Fund assets			25.2	25.2	26.2	26.1	26.2	25.3	24.6	24.0	23.8	23.8	23.8
			(In percent of GDP, unless otherwise indicated)
External sector
Current account balance			6.1	6.8	4.3	0.1	11.2	18.6	15.1	11.8	10.9	10.5	10.5
	Exports of goods (annual percentage change)		13.4	11.5	-18.5	-31.9	75.6	24.5	-6.1	-3.9	-1.0	-0.1	1.3
	Imports of goods (annual percentage change)		-9.0	2.6	-8.8	-17.2	17.4	8.1	-2.1	2.4	0.5	0.7	1.1
Terms of trade (annual percentage change)			0.5	0.5	-0.2	-0.7	1.0	-0.1	-0.1	-0.1	-0.1	-0.1	0.0
External public sector debt			16.2	16.2	17.1	22.8	22.0	22.8	22.9	22.4	22.2	21.7	21.1
Gross official reserves (in US$ million)			8,370	7,575	6,929	6,954	6,803	5,925	5,762	5,570	5,325	5,095	5,025
	In months of goods and NFS imports		10.5	9.9	10.4	10.9	10.0	8.8	8.4	8.0	7.6	7.3	7.1
			(Annual percentage change)
Money and credit
Net foreign assets			-9.3	-6.5	-6.4	5.9	-2.2	-8.3	-1.3	-1.6	-2.2	-2.1	-0.2
Net domestic assets			26.8	18.4	18.3	10.2	1.3	20.8	6.7	7.0	4.7	4.3	2.8
	Of which: private sector credit		4.9	4.0	4.4	-0.3	-0.3	8.4	5.4	5.7	3.1	2.9	3.0
Broad money (M3)			-0.4	1.2	2.9	7.1	-0.3	4.2	2.7	2.9	1.5	1.5	1.5
Memorandum items:
Nominal GDP (in TT$ billion)			157.2	161.3	161.3	144.4	145.3	157.6	166.1	175.6	180.9	186.2	191.7
	Non-energy sector (in percent of GDP)		77.0	74.4	77.1	83.5	69.7	66.5	71.1	73.1	74.8	76.0	76.5
	Energy sector (in percent of GDP)		23.0	25.6	22.9	16.5	30.3	33.5	28.9	26.9	25.2	24.0	23.5
Public expenditure (in percent of non-energy GDP)			41.2	40.6	40.1	42.0	47.8	49.5	45.1	41.8	39.7	38.0	37.1
Exchange rate (TT$/US$, end of period)			6.78	6.77	6.76	6.76	...	...	...	...	...	...	...
Holdings of SDRs, in millions of U.S. dollars			343	335	334	348	1087	1103	1113	1121	1128	1133	...
Crude oil price (US$ per barrel)			52.8	68.3	61.4	41.3	69.8	75.7	70.2	67.3	65.2	63.8	63.8
Henry Hub natural gas price (US$ per MMBtu)			3.0	3.2	2.6	2.0	3.9	4.2	3.6	3.3	3.1	3.1	3.1

Sources: Trinidad and Tobago authorities; UN Human Development Report; WEO; and IMF staff estimates and projections.

^{^1/}Includes VAT and Financial Intermediation Services Indirectly Measured (FISIM).

^{^2/}Data refer to fiscal year, for example 2019 covers FY2019 (October 2018-September 2019).

^{^3/}Defined as non-energy revenue minus expenditure (net of interest payments) of the central government, as a share of non-energy GDP.

^{^4/}Excluding debt issued for sterilization, public bodies’ debt, and borrowing from the CBTT.

^{^5/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

^{Table 1.}

Trinidad and Tobago: Selected Economic Indicators

GDP per capita (U.S. dollars, 2020)	15,265	Adult literacy rate (2010)	99
Population (millions, 2020)	1.40	Unemployment rate (Q2 2020)	5.2
Life expectancy at birth (years, 2019)	73.5	Human Development Index (2019, of 189 economies)	67
Under 5 mortality rate (per thousand, 2019)	17.5

								Projections
			2017	2018	2019	2020	Est. 2021	2022	2023	2024	2025	2026	2027
			(Annual percentage change, unless otherwise indicated)
National income and prices
Real GDP			-2.7	-0.7	-0.2	-7.4	-1.0	5.5	2.6	3.5	1.1	1.0	1.0
	Energy		-0.2	-3.4	-4.0	-12.2	-1.1	12.9	4.0	5.9	0.3	0.0	0.0
	Non-energy ^1/		-4.0	0.8	1.9	-4.9	-0.9	2.0	1.9	2.2	1.5	1.5	1.5
GDP deflator			8.2	3.4	0.2	-3.4	1.6	2.8	2.7	2.1	2.0	1.9	2.0
CPI inflation (end-of-period)			1.3	1.0	0.4	0.8	2.4	3.2	2.3	2.0	1.9	1.9	2.0
CPI inflation (period average)			1.9	1.0	1.0	0.6	1.6	2.8	2.7	2.1	2.0	1.9	2.0
Unemployment rate			4.4	3.5	4.3	4.7	5.4	...	...	...	...	...	...
Real effective exchange rate			-2.6	-1.3	-0.7	-1.5	-1.3	...	...	...	...	...	...
			(In percent of fiscal year GDP)
Central government finances^2/
Central government primary balance			-7.9	-3.0	-0.5	-8.2	-6.2	-4.1	0.0	1.9	2.7	3.3	3.8
	Of which: non-energy primary balance ^3/		-18.2	-15.1	-15.1	-19.3	-19.9	-21.8	-15.7	-12.7	-10.9	-9.7	-9.0
Central government overall balance			-10.8	-5.9	-3.7	-11.6	-10.1	-7.5	-4.1	-2.2	-1.3	-0.6	0.0
	Budgetary revenue		21.2	24.5	27.0	22.8	24.9	25.8	27.5	28.2	28.3	28.2	28.3
		Energy	6.2	8.3	11.0	7.6	8.4	10.5	11.0	11.1	10.9	10.6	10.7
		Non-energy	15.0	16.2	16.0	15.2	16.5	15.3	16.5	17.1	17.4	17.6	17.6
	Budgetary expenditure		32.0	30.5	30.6	34.3	35.0	33.3	31.6	30.4	29.5	28.8	28.3
		Of which: current expenditure	29.8	28.3	29.1	31.7	32.9	31.2	29.5	28.3	27.4	26.7	26.2
		Of which: interest expenditure	2.9	3.0	3.1	3.4	3.9	3.4	4.1	4.0	4.0	3.9	3.8
		Of which: capital expenditure	2.2	2.2	2.3	2.7	2.1	2.1	2.1	2.1	2.1	2.1	2.1
Central government debt ^4/			41.5	41.8	45.4	59.3	65.9	68.7	68.8	67.4	66.2	64.9	63.1
Public sector debt ^5/			59.2	58.4	61.9	79.6	87.2	88.4	87.0	84.0	81.8	79.5	76.6
Heritage and Stabilization Fund assets			25.2	25.2	26.2	26.1	26.2	25.3	24.6	24.0	23.8	23.8	23.8
			(In percent of GDP, unless otherwise indicated)
External sector
Current account balance			6.1	6.8	4.3	0.1	11.2	18.6	15.1	11.8	10.9	10.5	10.5
	Exports of goods (annual percentage change)		13.4	11.5	-18.5	-31.9	75.6	24.5	-6.1	-3.9	-1.0	-0.1	1.3
	Imports of goods (annual percentage change)		-9.0	2.6	-8.8	-17.2	17.4	8.1	-2.1	2.4	0.5	0.7	1.1
Terms of trade (annual percentage change)			0.5	0.5	-0.2	-0.7	1.0	-0.1	-0.1	-0.1	-0.1	-0.1	0.0
External public sector debt			16.2	16.2	17.1	22.8	22.0	22.8	22.9	22.4	22.2	21.7	21.1
Gross official reserves (in US$ million)			8,370	7,575	6,929	6,954	6,803	5,925	5,762	5,570	5,325	5,095	5,025
	In months of goods and NFS imports		10.5	9.9	10.4	10.9	10.0	8.8	8.4	8.0	7.6	7.3	7.1
			(Annual percentage change)
Money and credit
Net foreign assets			-9.3	-6.5	-6.4	5.9	-2.2	-8.3	-1.3	-1.6	-2.2	-2.1	-0.2
Net domestic assets			26.8	18.4	18.3	10.2	1.3	20.8	6.7	7.0	4.7	4.3	2.8
	Of which: private sector credit		4.9	4.0	4.4	-0.3	-0.3	8.4	5.4	5.7	3.1	2.9	3.0
Broad money (M3)			-0.4	1.2	2.9	7.1	-0.3	4.2	2.7	2.9	1.5	1.5	1.5
Memorandum items:
Nominal GDP (in TT$ billion)			157.2	161.3	161.3	144.4	145.3	157.6	166.1	175.6	180.9	186.2	191.7
	Non-energy sector (in percent of GDP)		77.0	74.4	77.1	83.5	69.7	66.5	71.1	73.1	74.8	76.0	76.5
	Energy sector (in percent of GDP)		23.0	25.6	22.9	16.5	30.3	33.5	28.9	26.9	25.2	24.0	23.5
Public expenditure (in percent of non-energy GDP)			41.2	40.6	40.1	42.0	47.8	49.5	45.1	41.8	39.7	38.0	37.1
Exchange rate (TT$/US$, end of period)			6.78	6.77	6.76	6.76	...	...	...	...	...	...	...
Holdings of SDRs, in millions of U.S. dollars			343	335	334	348	1087	1103	1113	1121	1128	1133	...
Crude oil price (US$ per barrel)			52.8	68.3	61.4	41.3	69.8	75.7	70.2	67.3	65.2	63.8	63.8
Henry Hub natural gas price (US$ per MMBtu)			3.0	3.2	2.6	2.0	3.9	4.2	3.6	3.3	3.1	3.1	3.1

Sources: Trinidad and Tobago authorities; UN Human Development Report; WEO; and IMF staff estimates and projections.

^{^1/}Includes VAT and Financial Intermediation Services Indirectly Measured (FISIM).

^{^2/}Data refer to fiscal year, for example 2019 covers FY2019 (October 2018-September 2019).

^{^3/}Defined as non-energy revenue minus expenditure (net of interest payments) of the central government, as a share of non-energy GDP.

^{^4/}Excluding debt issued for sterilization, public bodies’ debt, and borrowing from the CBTT.

^{^5/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

^{Table 2.}

Trinidad and Tobago: Central Government Operations ^1/

(In millions of Trinidad and Tobago dollars)

Sources: Trinidad and Tobago authorities; and IMF staff projections.

^{^1/}Fiscal years run from October 1 in the previous year to September 30 of the stated year.

^{^2/}For FY2022, the non-energy primary deficit would be TT$21.4 billion once it includes the authorities’ intention to accelerate VAT refunds of TT$2 billion.

^{Table 2.}

Trinidad and Tobago: Central Government Operations ^1/

(In millions of Trinidad and Tobago dollars)

									Projections
				2017	2018	2019	2020	Est 2021	2022	2023	2024	2025	2026	2027
				(In millions of Trinidad and Tobago dollars)
Total revenue and grants				32,896	39,308	43,482	33,843	36,149	39,856	45,085	48,832	50,788	52,087	53,837
Energy				9,668	13,372	17,725	11,286	12,210	16,261	18,041	19,184	19,492	19,634	20,315
	Corporate			5,613	7,851	9,406	5,429	6,697	8,295	8,879	9,452	9,604	9,675	10,054
	Royalties			939	2,288	4,091	2,835	2,423	4,344	5,281	5,536	5,533	5,501	5,617
	Other			3,116	3,233	4,228	3,022	3,090	3,622	3,882	4,196	4,355	4,458	4,644
Non-energy				23,228	25,936	25,757	22,558	23,939	23,595	27,044	29,648	31,296	32,453	33,522
	Tax revenue			18,028	21,226	20,219	18,278	19,983	19,851	22,171	23,949	25,135	26,110	26,992
		Income tax		8,448	9,353	9,792	7,642	7,761	8,355	9,745	10,758	11,413	11,948	12,396
		Goods and services tax		6,511	8,726	7,307	8,017	9,484	8,611	9,216	9,799	10,206	10,542	10,869
		International trade tax		2,685	2,733	2,672	2,301	2,373	2,527	2,831	2,990	3,101	3,193	3,287
		Property tax		3	4	50	2	2	1	2	2	2	2	2
		Other		398	317	356	378	363	356	378	399	414	426	439
	Non-tax revenue			5,160	4,692	5,467	4,267	3,937	3,726	4,853	5,676	6,136	6,318	6,504
	Other			40	18	70	12	19	19	21	23	24	25	26
Expenditure				49,680	48,834	49,411	51,048	50,784	51,478	51,764	52,617	53,049	53,264	53,873
Current				46,264	45,374	46,987	47,081	47,724	48,229	48,317	48,976	49,273	49,376	49,870
	Wages and salaries			9,938	9,094	9,137	9,248	9,138	9,235	9,485	9,688	9,795	9,835	10,028
	Goods and services			5,827	6,102	6,426	5,862	5,647	5,635	5,879	6,010	6,032	6,011	6,188
	Interest payments			4,468	4,787	5,046	5,062	5,693	5,252	6,727	7,013	7,178	7,272	7,305
	Transfers and subsidies			26,030	25,391	26,378	26,910	27,246	28,107	26,226	26,265	26,267	26,258	26,349
			Fuel subsidies	380	0	228	492	18	20	0	0	0	0	0
			Transfers to households	8,647	8,741	9,169	9,595	9,819	9,458	9,514	9,418	9,300	9,281	9,263
			Transfers to SOEs and utilities	4,671	4,810	5,656	4,422	5,166	5,379	4,707	4,773	4,649	4,587	4,622
			Transfers to local government and Tobago	3,482	3,424	3,425	3,527	3,389	3,525	3,340	3,329	3,452	3,454	3,456
			Transfers to statutory authorities	881	727	658	343	437	459	472	482	491	501	511
			Other	7,969	7,689	7,242	8,530	8,417	9,265	8,192	8,264	8,375	8,435	8,497
Capital expenditure and net lending				3,416	3,459	2,424	3,967	3,060	3,249	3,447	3,641	3,776	3,888	4,002
	Capital expenditure			3,449	3,492	3,791	3,978	3,071	3,270	3,469	3,665	3,800	3,913	4,028
	Net lending			-32	-33	-1,367	-11	-10	-21	-22	-23	-24	-25	-26
Non-energy balance				-26,452	-22,898	-23,653	-28,490	-26,845	-27,883	-24,719	-22,969	-21,753	-20,810	-20,351
Overall balance				-16,783	-9,526	-5,928	-17,205	-14,635	-11,622	-6,679	-3,785	-2,261	-1,177	-36
Primary balance				-12,315	-4,739	-883	-12,143	-8,942	-6,370	49	3,228	4,917	6,095	7,269
Non-energy primary balance ^2/				-21,983	-18,111	-18,608	-23,428	-21,152	-22,631	-17,992	-15,956	-14,575	-13,539	-13,046

Sources: Trinidad and Tobago authorities; and IMF staff projections.

^{^1/}Fiscal years run from October 1 in the previous year to September 30 of the stated year.

^{^2/}For FY2022, the non-energy primary deficit would be TT$21.4 billion once it includes the authorities’ intention to accelerate VAT refunds of TT$2 billion.

^{Table 2.}

Trinidad and Tobago: Central Government Operations ^1/

(In millions of Trinidad and Tobago dollars)

									Projections
				2017	2018	2019	2020	Est 2021	2022	2023	2024	2025	2026	2027
				(In millions of Trinidad and Tobago dollars)
Total revenue and grants				32,896	39,308	43,482	33,843	36,149	39,856	45,085	48,832	50,788	52,087	53,837
Energy				9,668	13,372	17,725	11,286	12,210	16,261	18,041	19,184	19,492	19,634	20,315
	Corporate			5,613	7,851	9,406	5,429	6,697	8,295	8,879	9,452	9,604	9,675	10,054
	Royalties			939	2,288	4,091	2,835	2,423	4,344	5,281	5,536	5,533	5,501	5,617
	Other			3,116	3,233	4,228	3,022	3,090	3,622	3,882	4,196	4,355	4,458	4,644
Non-energy				23,228	25,936	25,757	22,558	23,939	23,595	27,044	29,648	31,296	32,453	33,522
	Tax revenue			18,028	21,226	20,219	18,278	19,983	19,851	22,171	23,949	25,135	26,110	26,992
		Income tax		8,448	9,353	9,792	7,642	7,761	8,355	9,745	10,758	11,413	11,948	12,396
		Goods and services tax		6,511	8,726	7,307	8,017	9,484	8,611	9,216	9,799	10,206	10,542	10,869
		International trade tax		2,685	2,733	2,672	2,301	2,373	2,527	2,831	2,990	3,101	3,193	3,287
		Property tax		3	4	50	2	2	1	2	2	2	2	2
		Other		398	317	356	378	363	356	378	399	414	426	439
	Non-tax revenue			5,160	4,692	5,467	4,267	3,937	3,726	4,853	5,676	6,136	6,318	6,504
	Other			40	18	70	12	19	19	21	23	24	25	26
Expenditure				49,680	48,834	49,411	51,048	50,784	51,478	51,764	52,617	53,049	53,264	53,873
Current				46,264	45,374	46,987	47,081	47,724	48,229	48,317	48,976	49,273	49,376	49,870
	Wages and salaries			9,938	9,094	9,137	9,248	9,138	9,235	9,485	9,688	9,795	9,835	10,028
	Goods and services			5,827	6,102	6,426	5,862	5,647	5,635	5,879	6,010	6,032	6,011	6,188
	Interest payments			4,468	4,787	5,046	5,062	5,693	5,252	6,727	7,013	7,178	7,272	7,305
	Transfers and subsidies			26,030	25,391	26,378	26,910	27,246	28,107	26,226	26,265	26,267	26,258	26,349
			Fuel subsidies	380	0	228	492	18	20	0	0	0	0	0
			Transfers to households	8,647	8,741	9,169	9,595	9,819	9,458	9,514	9,418	9,300	9,281	9,263
			Transfers to SOEs and utilities	4,671	4,810	5,656	4,422	5,166	5,379	4,707	4,773	4,649	4,587	4,622
			Transfers to local government and Tobago	3,482	3,424	3,425	3,527	3,389	3,525	3,340	3,329	3,452	3,454	3,456
			Transfers to statutory authorities	881	727	658	343	437	459	472	482	491	501	511
			Other	7,969	7,689	7,242	8,530	8,417	9,265	8,192	8,264	8,375	8,435	8,497
Capital expenditure and net lending				3,416	3,459	2,424	3,967	3,060	3,249	3,447	3,641	3,776	3,888	4,002
	Capital expenditure			3,449	3,492	3,791	3,978	3,071	3,270	3,469	3,665	3,800	3,913	4,028
	Net lending			-32	-33	-1,367	-11	-10	-21	-22	-23	-24	-25	-26
Non-energy balance				-26,452	-22,898	-23,653	-28,490	-26,845	-27,883	-24,719	-22,969	-21,753	-20,810	-20,351
Overall balance				-16,783	-9,526	-5,928	-17,205	-14,635	-11,622	-6,679	-3,785	-2,261	-1,177	-36
Primary balance				-12,315	-4,739	-883	-12,143	-8,942	-6,370	49	3,228	4,917	6,095	7,269
Non-energy primary balance ^2/				-21,983	-18,111	-18,608	-23,428	-21,152	-22,631	-17,992	-15,956	-14,575	-13,539	-13,046

Sources: Trinidad and Tobago authorities; and IMF staff projections.

^{^1/}Fiscal years run from October 1 in the previous year to September 30 of the stated year.

^{^2/}For FY2022, the non-energy primary deficit would be TT$21.4 billion once it includes the authorities’ intention to accelerate VAT refunds of TT$2 billion.

^{Table 3.}

Trinidad and Tobago: Central Government Operations ^1/

(In percent of GDP)

Sources: Trinidad and Tobago authorities; and IMF staff projections.

^{^1/}Fiscal years run from October 1 in the previous year to September 30 of the stated year.

^{^2/}For FY2022, the non-energy primary balance would be-19.8 percent of non-energy GDP once it includes the authorities’ intention to accelerate VAT refunds of 1.9 percent of non-energy GDP.

^{^3/}Excluding debt issued for sterilization, public bodies’ debt, and borrowing from the CBTT.

^{^4/}Includes central government debt and guaranteed debt of non-self serviced SOEs and public bodies.

^{Table 3.}

Trinidad and Tobago: Central Government Operations ^1/

(In percent of GDP)

								Projections
			2017	2018	2019	2020	Est 2021	2022	2023	2024	2025	2026	2027
			(In percent of GDP)
Total revenue and grants			21.2	24.5	27.0	22.8	24.9	25.8	27.5	28.2	28.3	28.2	28.3
Energy			6.2	8.3	11.0	7.6	8.4	10.5	11.0	11.1	10.9	10.6	10.7
	Corporate		3.6	4.9	5.8	3.7	4.6	5.4	5.4	5.5	5.3	5.2	5.3
	Royalties		0.6	1.4	2.5	1.9	1.7	2.8	3.2	3.2	3.1	3.0	3.0
	Other		2.0	2.0	2.6	2.0	2.1	2.3	2.4	2.4	2.4	2.4	2.4
Non-energy			15.0	16.2	16.0	15.2	16.5	15.3	16.5	17.1	17.4	17.6	17.6
	Tax revenue		11.6	13.2	12.5	12.3	13.8	12.8	13.5	13.8	14.0	14.1	14.2
		Income tax	5.4	5.8	6.1	5.1	5.3	5.4	5.9	6.2	6.4	6.5	6.5
		Goods and services tax	4.2	5.4	4.5	5.4	6.5	5.6	5.6	5.7	5.7	5.7	5.7
		International trade tax	1.7	1.7	1.7	1.5	1.6	1.6	1.7	1.7	1.7	1.7	1.7
		Property tax	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
		Other	0.3	0.2	0.2	0.3	0.2	0.2	0.2	0.2	0.2	0.2	0.2
	Non-tax revenue		3.3	2.9	3.4	2.9	2.7	2.4	3.0	3.3	3.4	3.4	3.4
	Other		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Expenditure			32.0	30.5	30.6	34.3	35.0	33.3	31.6	30^4	29.5	28.8	28.3
Current			29.8	28.3	29.1	31.7

Measures		TT$ million	Percent of GDP
TAX Refunds		4,099	2.8
	VAT	3,765	2.5
	Income Tax	334	0.2
Financial Support		741	0.5
	To Caribbean Airlines (loan)	442	0.3
	Salary Relief Grants (2020–21)	177	0.1
	To Credit Unions	100	0.1
	Other ^1/	22	0.0
Social Protection		390	0.3
	Food support program	305	0.2
	Other ^2/	85	0.1
Health Sector (EPE)		331	0.2
Other Support		355	0.2
	SMEs (loan program)	300	0.2
	Tobago hoteliers	50	0.0
	Tobago House of Assembly
	Enterprise Development Fund	5	0.0
Total		5,835	4.0

Measures		TT$ million	Percent of GDP
TAX Refunds		4,099	2.8
	VAT	3,765	2.5
	Income Tax	334	0.2
Financial Support		741	0.5
	To Caribbean Airlines (loan)	442	0.3
	Salary Relief Grants (2020–21)	177	0.1
	To Credit Unions	100	0.1
	Other ^1/	22	0.0
Social Protection		390	0.3
	Food support program	305	0.2
	Other ^2/	85	0.1
Health Sector (EPE)		331	0.2
Other Support		355	0.2
	SMEs (loan program)	300	0.2
	Tobago hoteliers	50	0.0
	Tobago House of Assembly
	Enterprise Development Fund	5	0.0
Total		5,835	4.0

Instrument	Measure
	Monetary Policy
Reserve Requirement (RR)	RR on commercial bank deposits was cut by 300 bps to 14 percent; allowed to release about TT$ 4.3 billion liquidity into economy.
Policy rate	Reduced by 150 bps to 3.5 percent.
Prime lending rates	Reduced by 175 bps to 7Vi percent.
Mortgage rates	Suspended calculation of reference mortgage rates for 2 years from 10/01/2021, giving financial institutions more autonomy to lower them.
	FX policy
FX provisions	Established a special FX window through the EximBank to ensure uninterrupted imports of food and pharmaceuticals.
	Financial sector
Refinancing and loan deferral s	Banks offered deferred payments and refinanced existing loans for longer terms at lower rates.
Flexibility in loan restructuring	Limit to restructure loans increased from 1 to 2 for commercial loans (in lifetime) and for mortgages (in 5-year period) without their downgrading to non-performing status.
Loan moratorium on treatment restructured and deferred loans	Maintain debtor rating for refinanced and deferred loans through 09/30/2021; added flexibility in restructuring selected loans, without increasing impairment, for a one year from October 1, 2021.

Instrument	Measure
	Monetary Policy
Reserve Requirement (RR)	RR on commercial bank deposits was cut by 300 bps to 14 percent; allowed to release about TT$ 4.3 billion liquidity into economy.
Policy rate	Reduced by 150 bps to 3.5 percent.
Prime lending rates	Reduced by 175 bps to 7Vi percent.
Mortgage rates	Suspended calculation of reference mortgage rates for 2 years from 10/01/2021, giving financial institutions more autonomy to lower them.
	FX policy
FX provisions	Established a special FX window through the EximBank to ensure uninterrupted imports of food and pharmaceuticals.
	Financial sector
Refinancing and loan deferral s	Banks offered deferred payments and refinanced existing loans for longer terms at lower rates.
Flexibility in loan restructuring	Limit to restructure loans increased from 1 to 2 for commercial loans (in lifetime) and for mortgages (in 5-year period) without their downgrading to non-performing status.
Loan moratorium on treatment restructured and deferred loans	Maintain debtor rating for refinanced and deferred loans through 09/30/2021; added flexibility in restructuring selected loans, without increasing impairment, for a one year from October 1, 2021.

Topics

Countries

Series

About

Resources

Abstract

Context

Recent Developments

Outlook and Risks

Authorities’ Views

Policy Discussions

A. Near-Term Policies to Ensure a Sustained Recovery

Authorities’ Views

B. Strengthening the Fiscal Framework

Authorities’ Views

C. Modernizing Monetary and Exchange Rate Policy

Authorities’ Views

D. Reinforcing Financial Stability and Resilience

Authorities’ Views

E. Promoting Inclusive and Sustainable Growth

Authorities’ Views

F. Improving Data Adequacy

Authorities’ Views

Staff Appraisal