In a startling revelation, Trinidad and Tobago’s import cover has dropped to a mere 5.4 months, the lowest level recorded in decades. This critical metric, which measures how long foreign reserves can sustain national imports in the event of disrupted foreign earnings, serves as a barometer of economic stability. The sharp decline has sparked widespread concern among policymakers and citizens alike, signaling potential vulnerabilities in the nation’s financial health.
When the People’s National Movement (PNM) assumed office in 2015, the import cover stood at a robust 11 months. Over the subsequent decade, it gradually decreased to approximately eight months by early 2025. This decline, though worrisome, unfolded against a backdrop of global challenges, including energy shocks, inflation, and the COVID-19 pandemic.
However, the situation has taken a dramatic turn under the United National Congress (UNC) administration. In just five months, the import cover has plummeted from eight months to five months, a steeper decline than witnessed over the entire previous ten-year period. This rapid deterioration suggests deeper systemic issues, such as unsustainable foreign exchange spending, mismanagement of reserves, or a failure to restore investor and export confidence.
While supporters of the UNC may attribute the economic fragility to the PNM’s legacy, the current administration cannot evade accountability for its policy decisions. The alarming pace of the decline indicates either a lack of control or a failure to grasp the urgency of the situation. Trinidad and Tobago cannot afford a repeat of past foreign exchange crises.
Finance Minister Davendranath Tancoo and the Central Bank must now provide transparent explanations to the public. What policies have contributed to this steep decline in reserves? Are factors such as capital flight, excessive imports, or the depletion of savings to fund short-term consumption at play?
The numbers are unequivocal: the economy is losing reserves at an unprecedented rate. The government must act swiftly and with transparency to restore confidence and prevent a further downward spiral. The stakes are high, and the time for decisive action is now.