As Trinidad and Tobago (TT) prepares for the 2025-2026 national budget presentation on October 13, the nation stands at a critical juncture. Finance Minister Davendranath Tancoo faces the daunting task of addressing deep-rooted economic challenges that have plagued the country for years. Persistent issues such as low national savings, fragile foreign exchange reserves, stagnant productivity, and institutional inefficiencies have hindered growth and competitiveness. The upcoming budget must transcend the incremental adjustments of the past and deliver a decisive policy reset to restore economic stability and resilience.
Global uncertainties, including energy market volatility, rising US interest rates, and geopolitical risks, compound TT’s domestic pressures. Chronic fiscal deficits, an unstable foreign exchange market, and eroding buffers have weakened confidence in the economy. On the real economy front, weak productivity growth, distorted wages, and sluggish non-energy investment further exacerbate the situation. Policy measures often clash rather than complement each other, creating a cycle of inefficiency and diminishing credibility.
Drawing lessons from successful economies like the Gulf states and the Asian tigers, TT must prioritize long-term strategies over short-term fixes. These nations leveraged energy windfalls and mobilized savings to build robust sovereign wealth funds, reduce dependency on rents, and drive efficiency. In contrast, TT has seen low savings, inefficient public projects, and hesitant private investment. The lack of institutional adaptability has further hindered coherent policy design.
The 2025-2026 budget must focus on four key priorities: external stability, national savings mobilization, capital efficiency, and institutional reinforcement. A transparent and credible foreign exchange regime, robust savings frameworks, smarter public investment, and strengthened institutions are essential for sustainable growth. The budget should balance short-term stabilization with long-term reforms, demonstrating a clear trajectory for citizens, investors, and international partners.
This budget is not just a fiscal exercise; it is a moment for leadership. TT must move beyond improvisation and chart a durable course anchored in savings, efficiency, and credibility. The government’s choice is clear: continue with patchwork measures and risk decline, or seize this opportunity to transform the economic model and secure a stable future.