Inflation in Trinidad and Tobago

A short history of inflation in Trinidad and Tobago

Drought, Then Flood (2010)

Trinidadian inflation peaked at 16.2% in the year to August 2010, and almost all of it was food. A severe drought early in 2010 cut the local harvest, and flooding in the main growing districts followed it, damaging what had survived. Root crops, vegetables and fruit are largely grown at home, so their prices are set by local weather rather than by world markets; food inflation reached nearly 40% that August while the rest of the basket rose in low single figures.

For an economy whose earnings come from oil and gas, this is the usual shape: energy pays the country's bills and barely touches the price index, while the weather over a few hundred square miles of farmland moves it.

Post-Covid Inflation (2021 to 2023)

In Trinidad and Tobago, prices rose fastest in December 2022, at 8.7%. The causes of the post-Covid inflation were global in nature, beginning with the lockdowns: factories and ports closed and the shipping between them fell out of sequence, so goods took longer to make and longer to arrive. Governments had spent heavily supporting household incomes through those closures, so when restrictions lifted there was money waiting to be spent and not enough on the shelves to spend it on. Then in February 2022 Russia invaded Ukraine, disrupting two of the world's largest suppliers of wheat, fertiliser, oil and gas at once, and the cost of everything grown, heated or transported rose with them.

Because the causes were shared, so was the timing: most countries peaked within a few months of one another in late 2022. The major inflation events covers this episode and the others in more detail.