Macroeconomic Forecast Trinidad & Tobago

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Inflation in Trinidad & Tobago hit double digits in June for the first time in 14 years. According to the country's statistical office, headline consumer prices rose by 11.32% y-o-y in June, up from 9.99% the previous month, largely driven by a surge in local food prices. Going forward, while we acknowledge that there are upside risks, we hold onto our end-2008 CPI forecast of 8.8% for now. Firstly, the central bank are tightening rates (by 25bps in July to 8.50%), which should take some of the steam out of demand-side inflationary pressures. Secondly, global food prices have started to come off record highs, and should continue to moderate over the course of the year.