Boston, MA -- (SBWIRE) -- 11/27/2015 -- Structurally lower crude oil prices will stymie activity in Trinidad & Tobago's energy sector over the coming years, driving a slowdown in headline growth. Moreover, tepid consumer confidence and a pull-back in government spending on infrastructure projects indicate that growth in non-energy sectors of the economy will also struggle.

Trinidad & Tobago's nominal budget shortfall will widen in 2015, as lower oil prices drive down energy sector revenues. The Trinidadian government will not reduce expenditures as it will look to support household spending as labour market dynamics deteriorate.

Lower oil prices will place depreciatory pressure on the Trinidadian dollar (TTD) over the coming quarters, resulting in a deterioration of the country's terms of trade and weaker investment inflows. Open market operations by the central bank will prevent a significant depreciation of the currency, informing our view that a gradual weakening of the exchange rate is on the cards in the coming quarters.

Get More Details on this Report and a Full Table of Contents at Trinidad & Tobago Country Risk Report Q1 2016

Major Forecast Changes:

We have revised our current account surplus forecasts to 2.8% of GDP in 2015 and 2.1% of GDP in 2016 on the back of a weaker performance in crude oil export values than we had previously expected.

We now expect T&T to enter a recession in 2015 and contract again in 2016 as the economy remains uncompetitive for non-extractive investments and commodity prices are structurally lower.

Key Risks To Outlook

We acknowledge both upside and downside risks to our real GDP growth forecasts. On the downside, lower oil prices could spur a prolonged recession in T&T's economy, particularly if foreign investment into the energy sector dries up on the back of smaller prospective profit margins. On the upside, we will be watching to see if the Trinidadian government looks to secure any major bilateral loans, which could help to soften the impact of lower oil prices on the country's fiscal accounts.

The Trinidad & Tobago Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Trinidad & Tobago. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Trinidad & Tobago's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.

Key Uses

-Forecast the pace and stability of Trinidad & Tobago's economic and industry growth through end-2019.
-Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
-Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
-Contextualise Trinidad & Tobago's country risks against regional peers using BMI's country comparative Risk Index system.
-Evaluate external threats to doing business in Trinidad & Tobago, including currency volatility, the commodity price boom and protectionist policies.

The Trinidad & Tobago Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Trinidad & Tobago' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Trinidad & Tobago through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Trinidad & Tobago Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

-Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
-BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

-Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
-Balance of Payments - trade and investment, current and capital account.
-Monetary Policy

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