Friday 23rd October 2026
Trinidad and Tobago has tabled a US$9.3bn national budget for fiscal 2027, combining new revenue measures, social initiatives and plans to revive the country’s energy sector as the government seeks to narrow the fiscal deficit amid weak economic activity.
Finance Minister Davendranath Tancoo projected expenditure of US$9.3bn against revenue of US$8.8bn, leaving a deficit of about US$536mn, equivalent to 2.1% of GDP. This compares with an estimated US$1.03bn deficit in fiscal 2026.
The budget assumes an oil price of US$77 per barrel and natural gas at US$5 per million British thermal units.
Government expects roughly US$2.11bn in oil revenue, with the remainder largely generated from non-oil sources. Health receives about US$1.19bn, education and training US$1.18bn, national security US$1.08bn and public utilities US$602mn. Infrastructure, transport, agriculture and housing also receive sizeable allocations.
Education receives about US$1.18bn, approximately US$109mn less than the previous year. The allocation includes about US$14.7mn for laptops and nearly US$972,000 for artificial intelligence and other digital education programmes.
The government is proposing several tax changes to strengthen revenue. Businesses would be limited to using carried-forward losses against 75% of chargeable profits from January 2027, a measure expected to raise about US$63mn.
The unemployment levy on petroleum companies would rise from 5% to 8%, while value-added tax would be extended to digital services supplied by non-resident providers.
Pensioners would receive a higher annual personal allowance, while a surcharge would apply to residential electricity consumption above 3,000 kilowatt-hours per billing period. Government also plans savings bonds denominated in Trinidad and Tobago and US dollars to widen retail participation in government securities.
Energy revival is another central element of the budget. Tancoo announced plans for a phased restart of the former Petrotrin refinery at Pointe-a-Pierre, closed in 2018 after years of losses and debt. “We will restart the refinery. We are advancing the phased restart of the Guaracara Refinery at Pointe-a-Pierre,” said Tancoo.
He announced that the government was evaluating proposals from potential investors and would seek a commercially viable arrangement. “Let me be clear, we will approach the restart of this national asset with fiscal discipline,” he said.
The administration is also seeking to reverse declining natural gas production, which has constrained LNG and petrochemical output. Tancoo said more than 70% of foreign-exchange earnings come from energy commodity exports and highlighted new projects by bpTT and EOG Resources. Upstream capital expenditure is projected at more than US$2bn in 2026, rising to US$2.3bn in 2027 and US$2.6bn in 2028.
The opposition, however, has mounted a broad challenge to the budget’s economic assumptions and social provisions. Opposition Leader Pennelope Beckles cited official figures showing a 0.5% contraction in 2025 and a projected 2.2% decline in 2026, arguing that the country is already in recession.
“Mr Speaker, unfortunately, the data is irrefutable: Trinidad and Tobago is in a recession,” said Beckles, questioning inconsistencies between domestic economic estimates and figures previously presented to the IMF. The Ministry of Finance’s 2025 review had projected a 0.8% contraction, while the IMF’s June 2026 Article IV report referred to 0.8% growth.
The opposition also challenged the government’s social assistance arithmetic. Beckles argued that around 30,000 pensioners may not benefit from the announced pension increase because the combined ceiling for National Insurance and senior citizens’ pension payments remains unchanged. She noted that the allocation for senior citizens’ pensions falls from about US$677mn in 2026 to US$568mn in 2027, despite the promised increase.
Former finance minister Colm Imbert separately warned that weaker energy output and falling real GDP could place the economy under greater strain. Natural gas production averaged about 2.44bn standard cubic feet per day during the first eight months of fiscal 2026, down 5.1% from a year earlier, while unemployment rose to 5.4% in the first quarter. Government nevertheless expects planned energy investments to support recovery.
Opposition criticism also extends to planned divestments of state assets including National Quarries, Hilton Trinidad, Magdalena Grand and LABIDCO. Former minister Randall Mitchell has argued that strategically important assets, particularly LABIDCO’s industrial estate and fabrication facilities, require clearer valuations and justification before any sale.
Prime Minister Kamla Persad-Bissessar has defended the divestment strategy, saying loss-making enterprises should not depend indefinitely on taxpayers. “Government revenues must be used to benefit law-abiding, honest citizens; it should not be used to provide welfare to failing state-run businesses,” she argued.
The budget debate therefore centres on whether the government’s energy revival, revenue measures and investment plans can reverse contraction while containing the deficit. The opposition argues that weaker growth, reduced social allocations and uncertainty around state-asset sales could make that adjustment more difficult.
Source: Caribbean Insight – Volume 48, Issue 19
Photo credit – Government of the Republic of Trinidad & Tobago (Ministry of Finance)