Ambition · Week 08 · Money Basics & Control

And Where You Actually Fit in It

Figures are in Trinidad and Tobago dollars unless marked US$.

The economy is one of those words that gets thrown around constantly but rarely gets explained properly. Politicians talk about it in speeches. Analysts debate it on television. The fruit and vegetable vendors always have strong opinions about it every weekend.

But the actual mechanics of how an economy works can stay a bit of a mystery. Every time you check your bank balance, swipe your card, or negotiate your salary, you are participating in it. You do this every single day, probably without a clear picture of how the system around you actually functions.

That is not ignorance. Nobody teaches this stuff clearly. Economics at school was either abstract theory or a subject you sat through hoping it would not appear on exams in a way that mattered. But understanding how the economy works, even at a basic level, changes how you read the news, how you look at your own money, and what the next headline means for you.

So here it is: how the economy works in Trinidad and Tobago, and what it means for you specifically.

The price of almost everything you buy is determined by the relationship between supply and demand. When a lot of people want something and there is not much of it available, the price goes up. When there is more of something than people want, the price comes down.

This plays out constantly in ways we recognise. During a hurricane warning, the price of water and canned goods effectively rises because demand spikes and supply stays fixed. When a bumper harvest of fruit and vegetables hits the markets, the price falls because supply is plentiful. When oil prices rise globally, it eventually shows up in everything from fuel costs to the price of imported goods, because transport and production costs are embedded in almost everything we consume.

The last time the price of something you buy every week jumped, was it more people wanting it, or less of it to go around?

That is where the T&T story gets more complicated. T&T’s economy runs on oil and gas. The energy sector was an estimated 20.9 per cent of GDP in 2025, but it supplies about three-quarters of the foreign exchange that comes into the country, according to the IMF. Source: IMF, via Trinidad Guardian · 2026 When oil and gas prices are high and production is strong, the government collects more revenue, public sector wages get paid, social services are funded, and the broader economy feels it. When energy revenues fall, everything tightens.

This matters to you personally even if you have never worked a day in the energy sector. In fiscal 2026, energy brought in $17.1 billion (about US$2.5 billion) of the government’s $54.2 billion in revenue close to a third (Ambition calculation). Source: Ministry of Finance · 2026 That money funds the public service, infrastructure, education and subsidies. A shortfall in energy revenue ripples through every part of the economy.

Here is a number that illustrates the dependency clearly: in the first quarter of 2025, 12,800 of the 558,900 people with jobs in T&T worked in petroleum and gas, about 2 per cent (Ambition calculation). Source: CSO, via Trinidad Guardian · 2026 Two per cent of workers. Three-quarters of the foreign exchange.

Hold onto that imbalance. Almost every major financial and policy decision the country makes traces back to it.

Two things the Central Bank manages that touch your life directly are inflation and interest rates.

Inflation is the rate at which prices rise over time. When inflation is low, your money holds its value reasonably well. When it is high, the same $100 buys you less than it did a year ago. Headline inflation was 0.6 per cent in July 2026, about $6 more for every $1,000 of spending than a year earlier. Source: CBTT · 2026

Your monthly grocery bill: $______ × 0.006 = roughly how much more the same basket cost than a year ago.

The Central Bank’s main lever is the repo rate from Section 03, the rate it charges commercial banks for overnight funding. It has been 3.50 per cent since March 2020, and the Central Bank held it there again on 30 September 2026. Source: CBTT · 2026 This rate influences what commercial banks charge when they lend money and, to a lesser extent, what they pay when you deposit money.

Here is what that looks like in dollars. Banks paid an average of 0.92 per cent on deposits in June 2026, about $92 a year on $10,000. They charged an average of 6.90 per cent on loans, about $6,900 a year on $100,000. Source: CBTT · 2026 Where is your money sitting right now, and what is it earning?

The economy is not something that happens to you. You are a participant in it, and the choices you make count, both for your own financial position and collectively.

Your salary connects to the economy through one of three channels. Public sector workers earn based on negotiated scales that are ultimately funded by government revenue, which is itself tied to energy prices. Private sector workers in distribution, retail, and services earn based on what businesses can afford to pay, which is tied to how much consumers are spending. And everyone’s savings and loans are priced off the repo rate. Which side of your own balance sheet that rate works on, what you own or what you owe is the subject of the assets and liabilities guide.

Which channel does your income run through  and what has that part of the economy done over the last two years?

Knowing this will not tell you the future. It tells you which headlines are about your money.

You do not need to read every economic report. Five numbers carry most of the story, and each one is published on a fixed schedule.

Unemployment is a lagging indicator. It rises after the economy has already weakened and falls after it has already recovered. At 5.4 per cent in the first quarter of 2026, up from 4.9 per cent a year earlier, it tells you where the labour market has been more than where it is going. Source: CBTT · 2026

The foreign exchange situation sits on its own. T&T’s access to US dollars affects import costs, business operations and the price of what is on the supermarket shelf. Gross official reserves stood at US$5.29 billion at the end of August 2026 i.e. 6.1 months of imports. Source: Ministry of Finance · 2026

SOURCES

This article is published by Ambition for informational and educational purposes only. It does not constitute financial, investment, or legal advice. Ambition reports facts, explains their meaning, and provides sourced context, it does not predict outcomes or recommend actions. Readers should consult licensed professionals before making any financial decisions. All statistics carry inline source attribution; readers are encouraged to verify primary sources independently.