Trinidad and Tobago’s economy contracted in 2025 amidst mounting public debt and worsening household financial pressure, according to the Central Bank’s latest Financial Stability Report. The central bank highlighted a challenging economic backdrop characterized by persistent uncertainty, even as the nation’s broader financial sector managed to maintain structural resilience.
Official figures from the report reveal that gross domestic product declined by 0.5 percent over the course of 2025. Although the energy sector posted a modest increase in production, it was insufficient to offset sluggish performance across non-energy industries. Key drivers of the contraction included significant downturns in both the construction and trade sectors, reflecting broader economic drag across non-resource commercial activities.
Compounding the economic contraction, government debt continued its upward trajectory, reaching TT$146.9 billion by the end of 2025. This debt load now stands at approximately 84 percent of the country’s total gross domestic product, signaling heightened fiscal exposure for the sovereign.
The central bank expressed explicit concern regarding the financial health of domestic households, noting a notable rise in credit card borrowing and an increase in non-performing consumer loans. As economic uncertainty lingers, borrowing reliance has expanded, escalating overall vulnerability among household balance sheets across the twin-island republic.
In its systemic evaluation, the central bank categorized the country’s financial stability risks as moderate to elevated, pinpointing four major threat vectors: elevated public debt levels, cyber and operational threats, liquidity pressures, and mounting household indebtedness.
Despite these compounding headwinds, the report provided reassurance regarding the core financial system. Trinidad and Tobago’s banking sector has remained resilient throughout the downturn, supported by robust capital positions and sustained profitability among commercial institutions.
Looking ahead, the central bank warned that external economic shocks, rising global commodity prices, and deep domestic exposure to sovereign debt could create further strain. Emphasizing the need for ongoing policy caution, financial authorities urged market participants and regulators to maintain strict vigilance in navigating the uncertain economic landscape.
