News & Media
An Overview of the Current Crisis
In Trinidad and Tobago, we do not produce many of the things we consume. One notable example is our food which is mostly imported and costs us TT $5.8 billion in imports in 2014. Many other items are also imported including manufactured goods like cell phones, cars etc., capital equipment, medicines etc. In 2014, T&T spent TT $72 billion in imports. We can afford these imports since we usually earn significant amounts of US dollars mainly by exporting petroleum products. As Figure 1 shows, T&T inflow of foreign exchange (exports) is usually larger than our outflows (imports). However, these conditions have changed. A collapse in the prices of petroleum products has significantly reduced our inflow of foreign exchange. As Table 1 shows, this collapse began in the last quarter of 2014 and has continued since. This collapse has led to decreases in exports, reserves, government revenue and real GDP. Petroleum prices are forecasted to remain relatively low in the foreseeable future thereby extending our woes.