Financial Economist Dr Vaalmiki Arjoon says despite who wins the upcoming general election, the new government needs to make forex earnings a top priority.
According to Arjoon, approximately 40 per cent (US$2.6 billion in 2023) of Trinidad and Tobago’s imports come from the United States and with President Donald Trump instituting Tariffs–that have already started increasing prices in the US–we may be faced with increased prices from our US suppliers when importing.
He said: “Higher currency prices will require us to use more forex to pay for imports from the US. For instance, the tariff on agriculture-based imports in the US, like fertilizers from Canada, will drive up prices of US agricultural produce and manufactured food items, which means we will require more forex to pay for food items imported from the US. The same goes for steel and aluminum-related products.”
Arjoon explained that with the availability of US dollars from banks becoming more restrictive, higher import prices may also drive more black market purchases to source the required US to meet these higher prices.
“Increased black market demand may very well increase the black market rates. This is indeed very risky to our economic well-being – it will drive up the cost of doing business leading to inflationary pressures and undermining investor confidence,” he said.
Arjoon noted that it also underscores the critical need for the non-energy sectors to expand their export market share.
“This is the key to bolstering our reserves and building more resilience against these seemingly never-ending global economic shocks. The new government must act decisively to safeguard our economic future by addressing this challenge head-on,” he said.
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