IMF Staff Country Reports

Trinidad and Tobago: Selected Issues

June 5, 2024

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International Monetary Fund. Western Hemisphere Dept. "Trinidad and Tobago: Selected Issues", IMF Staff Country Reports 2024, 151 (2024), accessed November 12, 2024, https://doi.org/10.5089/9798400277238.002

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Summary

This Selected Issues paper aims to provide an overview of potential benefits of adopting a formal fiscal rule for Trinidad and Tobago, along with an overview of the international experience with anchoring fiscal policy in natural resource-rich countries. The authorities have also aimed to manage the swings in energy prices with its Sovereign Wealth Fund. A rules-based fiscal framework consists of several main elements that guide the management of a country's fiscal policy. A strong institutional framework for fiscal policy is key to successfully implement a rule-based fiscal framework. Trinidad and Tobago could gain from further deepening reforms underway to strengthen its fiscal framework before considering the adoption of a fiscal rule. The eventual depletion of oil and gas reserves and lower global demand for fossil fuel due to the transition to a low-carbon environment require accumulating adequate savings for future generations. A well-designed fiscal rule can help address these challenges. Moreover, the effectiveness of fiscal rules would hinge on several factors, including strong fiscal institutions, active and sound macroeconomic forecasting, and analysis, and strong and sustained political commitment to a medium-term fiscal goal.

Subject: Economic sectors, Environment, Fiscal policy, Fiscal rules, Greenhouse gas emissions, International organization, Monetary policy, Natural gas sector, Renewable energy

Keywords: B. Trinidad and Tobago's exposure, C. policy implication, Caribbean, Digitalization strategy, Emissions intensity of Trinidad and Tobago, EU Market, Fiscal rules, Global, Greenhouse gas emissions, Natural gas sector, Renewable energy

Publication Details

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