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THIS country’s economy contracted by 2.1 per cent in the first quarter of 2025, Central Bank figures revealed, with declines across both the energy and non-energy sectors. It was a development the bank's Monetary Policy Committee cited when it left the policy repo rate unchanged at 3.50 per cent, on September 26.
The central bank’s Economic DataPack for September 2025 reported energy-sector output fell 4.8 per cent year-on-year in quarter one (Q1) while the non-energy sector contracted by one per cent, underlining that the downturn was broad-based.
These declines, the bank said, were reflected in a mixed performance across petroleum and related industries: crude oil output posted a modest increase in April; natural gas production eased; and petrochemical output diverged – gains in ammonia and urea were offset by a sharp fall in methanol.

Inflation subdued

The DataPack showed headline inflation at 1.4 per cent year-on-year in August 2025 – unchanged from three months earlier – while a measure of core inflation (which excludes food) rose modestly to about one per cent.
The bank noted that food inflation eased as vegetable prices declined, even as wholesale and building-material prices recorded modest increases.
The committee highlighted an uncertain global backdrop – including geopolitical tensions and uncertainty in trade policy – and said that recent movements in international yields following Federal Reserve shifts have fed through domestically.
The bank noted that the domestic three-month TT–US treasury spread narrowed in August from earlier in the year, a development that, together with government financing operations, has affected liquidity.
Commercial banks’ excess reserves averaged about $4.2 billion in August but fell to roughly $3.9 billion in the first half of September, the bank said. It also reported moderation in private-sector credit growth. Year-on-year growth in July slowed to 7.7 per cent, down from 9.1 per cent in April.

Concerns for external, fiscal positions

The Data Pack showed a reduction in gross official reserves and a compression of import cover in the first half of 2025, with reserves close to US$4.9 billion.
Fiscal metrics also show sustained pressure: adjusted general government debt rose to $147.5 billion, or about 84.4 per cent of GDP, as at July 2025.
The bank flagged that a persistent non-energy deficit is contributing to borrowing needs that influence domestic liquidity conditions. The bank cautioned that expected gains from development of new natural-gas fields could be offset by underperformance in construction and some manufacturing segments, tilting the near-term growth outlook to the downside.
The MPC framed the decision to remain on hold as data-dependent. While the bank judged current inflation readings to be consistent with maintaining the repo rate, it said growth prospects were tentative and subject to both international and domestic shocks.
The announcement left open the possibility of future policy adjustments should the balance of risks change materially.
Market participants will watch incoming data – particularly Q3 activity, employment numbers, liquidity trends and any shifts in price dynamics – for signals that may prompt a change in the Bank’s stance.
The Central Bank’s next scheduled monetary policy announcement is December 31.
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