The twin island state of Trinidad and Tobago, located in the southern end of the Caribbean, is a small but high-income country. With a population of 1.3 million people and rich in natural resources, it is one of the wealthiest countries in the Caribbean.
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Trinidad and Tobago faced unprecedented challenges in 2020-21. The combined effects of Covid-19, energy production cuts and price shocks, pushed the economy further into recession. Consequently, real GDP contracted by 7.4% in 2020.
Additionally, labour market conditions weakened considerably, causing an upsurge in retrenchments, temporary layoffs, and a reduction in working hours and labour force participation. This resulted in an unemployment rate of 4.7% in 2020; a minor increase from 4.3% in 2019.
Total public sector debt rose to TT $134,640.0 million in fiscal 2020, from TT $121,021.0 million in 2019 and total government debt service was expected to increase by 58.8%. This substantial increase in the debt stock and repayment was largely due to the government’s efforts to reduce the impact of the COVID-19 pandemic on the under-privileged in the society. Their initiatives included salary relief to workers who were laid-off or faced reduced working hours, VAT and income tax refunds to individuals and SMEs in addition to import duty waivers on imports of certain medical and emergency supplies.