Finance Minister Davendranath Tancoo has not yet presented the mid-year review of Budget 2026. Convention places it between May and June. Until he speaks, the government's official position on the fiscal year's trajectory remains the set of assumptions he laid out on October 13, 2025 - oil at US$73.25 per barrel, gas at US$4.25 per MMBtu, a deficit of $3.865 billion at 2.2 percent of GDP, and an economy growing just enough to avoid the word "recession."
The problem is that every independent institution with access to the same data has already published its own assessment, and none of them agree with the Finance Minister.
The IMF's February 2026 Article IV concluding statement projected the deficit at 5.0 percent of GDP - more than double the government's figure. Revenue was estimated at 29.9 percent of GDP against expenditure of 34.9 percent. The Fund noted that the prior fiscal year's deficit had been 5.5 percent, meaning the fiscal position was deteriorating, not improving. Central government debt stood at 67.8 percent of GDP. Total public sector debt, including state enterprise borrowing, had reached 84.2 percent.
The IMF recommended what it called "sizeable fiscal consolidation" - the diplomatic term for spending cuts and revenue measures that no sitting government wants to announce. Tancoo's response was to describe the IMF's analysis as requiring a "bold rejection of IMF mathematics." That phrase will age well or poorly depending on what the mid-year numbers actually show.
The Price Gap
The budget's energy revenue projections rest on price assumptions that have been overtaken by the market. Oil was pegged at US$73.25 per barrel. As of early April 2026, WTI crude is trading around US$60 - roughly US$10 to US$12 below the budget's assumption. Every dollar below the peg reduces energy revenue by tens of millions over the fiscal year. At current prices, the shortfall against budgeted oil revenue is substantial.
Gas was pegged at US$4.25 per MMBtu. Henry Hub natural gas has traded below that level for most of the fiscal year, hovering around US$3.09 per MMBtu through the first quarter. The gap between assumption and reality is not enormous on a per-unit basis, but it accumulates across billions of cubic feet of production.
The energy sector itself is contracting. The IMF projects a 4.5 percent decline in energy sector output for the current fiscal year. Oil production sits around 60,000 barrels per day, down 25 percent from 2015 levels. Gas production is approximately 2.3 to 2.5 billion cubic feet per day, down roughly a third from peak. Atlantic LNG's Train 1 has been permanently decommissioned. The downstream petrochemical complex continues to thin out.
A budget built on energy prices that are $10 above reality and energy production that is declining by 4.5 percent faces an arithmetic problem that fiscal creativity cannot solve. The revenue will either come from somewhere else or it will not come at all.
The Reserves Question
Trinidad and Tobago's gross official reserves have been declining steadily. The IMF's projection puts them at approximately US$4.6 billion by end-2026, representing 5.4 months of import cover. That figure remains above the conventional danger threshold of three months, but the trajectory is downward, and it has been downward for a decade. Reserves stood at US$11.5 billion in 2015. More than half are gone.
The Heritage and Stabilisation Fund holds approximately US$6.38 billion. The government withdrew US$410 million in fiscal 2025 while making zero deposits. The withdrawal consumed more than 60 percent of the fund's investment returns. The government also drew US$2.8 billion from the HSF over the broader period. At this pace - steady withdrawals, zero deposits - the fund's real value will erode within a decade. The interest earned will not keep pace with what is being taken out.
The Auditor General has called for amendments to the HSF Act to clarify the deposit rules. The fact that no government has made a deposit since September 2013 - through commodity booms, recoveries, and elevated energy prices - suggests the problem is not mechanical. The deposit rules exist. The political will to follow them does not.
The Supplemental and the Wages
The supplemental appropriation of TT$3.14 billion, approved early in the fiscal year, was itself an acknowledgment that the original budget's expenditure estimates were insufficient. Supplemental appropriations are routine in government budgeting, but the size of this one - 5.3 percent of the original budget - was notable.
The larger fiscal unknown is the public sector wage deal. The 10 percent increase for the 2014-2016 and 2017-2019 bargaining periods was signed on December 2, 2025. The back pay alone is estimated at $3.8 billion. The ongoing annual recurrent cost is approximately $420 million. Former Finance Minister Colm Imbert pointed out that no appropriation for the back pay appeared in the budget statement - meaning the money must come from borrowing, the HSF, or a supplemental appropriation that has not yet been presented.
Independent analysts project that when the wage deal, supplemental appropriation, unbudgeted expenditures, and energy revenue shortfalls are combined, the real deficit for fiscal 2026 could reach $8 to $9 billion - roughly 5 to 6 percent of GDP. That aligns with the IMF's projection and sits far above the government's.
The Interest Rate Disconnect
The Central Bank of Trinidad and Tobago has held its repo rate at 3.50 percent since March 2020 - through the pandemic, through the recovery, and through a period when the US Federal Reserve raised its benchmark rate to 5.25-5.50 percent. The resulting gap between Trinidad and Tobago's rate and the US rate is the widest it has been in decades.
That gap has consequences. Capital has incentive to flow outward, toward higher-yielding US dollar assets, which puts further pressure on reserves that are already declining. And the Central Bank has limited room to use monetary policy as a stabilisation tool, because raising rates would increase the cost of government borrowing at a time when the fiscal position is already strained.
The Central Bank's choice to hold rates low is defensible as a growth-support measure. But it is a trade-off, not a free option. The cost shows up in the forex market, where the official exchange rate of TT$6.80 to US$1 has become increasingly detached from what businesses and individuals actually experience when trying to buy dollars. The parallel market, commercial bank allocation queues, and the persistent forex shortage all reflect a currency that is officially stable and functionally undervalued.
What Tancoo Will Have to Address
When the mid-year review is eventually presented, the Finance Minister will face a set of questions that the numbers have already answered for everyone except the government.
First, the revenue shortfall. Energy prices are below budget assumptions. Energy production is declining. Non-energy revenue, while growing modestly through improved tax administration, cannot close the gap. What is the revised revenue estimate, and how far below the October projection does it fall?
Second, the deficit. The IMF says 5.0 percent of GDP. The government said 2.2 percent. The mid-year review will have to pick a number. If it is closer to the IMF's estimate, the budget's fiscal framework was wrong from the start. If it is closer to the government's, the methodology will need to be explained in detail, because the math will not be obvious.
Third, the wage deal funding. Where is the $3.8 billion in back pay coming from? Has additional borrowing been arranged? Will the HSF absorb another withdrawal? The budget cannot claim a 2.2 percent deficit while excluding billions in committed expenditure from the calculation.
Fourth, the HSF. Will the government make a deposit? The fund has gone more than twelve years without one. At some point, the question shifts from whether deposits will resume to whether the fund will be drawn down to cover annual shortfalls until it is no longer large enough to matter.
Fifth, the exchange rate. The IMF recommended adjustments. The government rejected devaluation outright. But reserves are declining, the interest rate gap is widening, and the forex shortage is chronic. Something will give. The mid-year review is the government's opportunity to explain what its plan is - or to acknowledge that there is not one.
The Comparison That Matters
The Finance Minister profile documents the gap between the NIF bond's stated and actual backing. The Budget Scorecard published on this site tracks the specific commitments made in the October budget statement. The Promise Tracker monitors the full manifesto. The mid-year review will provide the government's own assessment of progress. The IMF's Article IV statement provides an independent external assessment.
When those three documents - the budget, the mid-year review, and the IMF report - are placed side by side, the distance between what was promised and what happened will be measurable. That is what this article is for: not to predict what Tancoo will say, but to lay down a marker on what the evidence already shows before he says it.
The budget's oil price assumption is wrong. The energy sector is contracting. The deficit is larger than projected. The reserves are declining. The wage deal is unfunded. The HSF is being drawn down. The credit agencies have shifted their outlooks to negative.
These are not predictions. These are the published findings of the IMF, the Central Bank, Moody's, S&P, and the Auditor General. The mid-year review will be the government's response to a reality that the rest of the world has already documented.
The numbers are bad. That much is settled. What remains unsettled is whether the Finance Minister will say so - whether the mid-year review will contain measures that match the size of the problem, or whether it will be another round of insisting that the IMF's mathematics require bold rejection.
The IMF's mathematics do not respond to boldness. They respond to arithmetic. And the arithmetic, as of April 2026, is not on the government's side.
Sources
- IMF: Trinidad and Tobago 2026 Article IV Mission Concluding Statement (February 2026)
- Ministry of Finance: Budget Statement 2026 - "T&T First" (October 13, 2025)
- Central Bank of Trinidad and Tobago: Monetary Policy Announcements (2020-2026)
- Central Bank of Trinidad and Tobago: Gross Official Reserves data (2025-2026)
- Ministry of Finance: Heritage and Stabilisation Fund Quarterly Reports (2025)
- Trinidad Express: "$2.8B withdrawn from HSF in 2025"
- Trinidad Express: "No going to IMF, no devaluation" (2025)
- Trinidad Guardian: "$3.8B back pay for public servants - CPO, PSA agree to 10% wage hike" (December 2025)
- Trinidad Guardian: "Imbert: Government manipulating economic data" (2026)
- Trinidad Express: "Imbert: Govt must return to Parliament for PSA backpay funding" (2026)
- Newsday: "Colm Imbert expects $15B budget deficit" (September 2025)
- Auditor General of Trinidad and Tobago: Report on the Heritage and Stabilisation Fund
- EY Trinidad: Focus on Trinidad and Tobago Budget 2026
- PwC Trinidad: National Budget 2026 analysis
- U.S. Energy Information Administration: WTI crude oil price data (2025-2026)
- CME Group: Henry Hub Natural Gas Futures data (2025-2026)
- Moody's Investors Service: Trinidad and Tobago outlook change (2025)
- S&P Global Ratings: Trinidad and Tobago outlook change (2025)