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Is this as good as it gets?

Thursday, July 17, 2014
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Minister of Finance Larry Howai

In its most recent assessment of T&T, the International Monetary Fund (IMF) presents a picture of an economy that seems to be in very good shape as at the middle of 2014, with growth in the country’s GDP projected to be the strongest in six years, in an environment of moderately low inflation, almost full employment, a reasonable fiscal deficit and a debt stock that is manageable. 


The IMF numbers indicate that the T&T economy should grow by 2.3 per cent in 2014, predict that the inflation rate will end the year at 3.7 per cent and report that the latest read of the rate of unemployment is 3.7 per cent. 


Moreover, the Washington, DC-based institution—in its public information note based on its June 2014 Article IV Consultation with the T&T authorities, which was released on July 9—projects that the T&T Government will end the 2014 fiscal year in September with a deficit of only 1.5 per cent (well short of the three per cent danger zone) and that the country’s total public-sector debt is estimated at 31 per cent of GDP, down from 36 per cent in 2010. 


What’s more on the debt front, T&T’s total external public-sector debt is only seven per cent of GDP, which means the Government owes a totally manageable sum to its foreign creditors and would have the ability to return to the foreign capital markets for additional funding should the need arise. (Nominal GDP in 2014 is projected to $189.6 billion.)


In addition to all of the above, the country’s foreign-exchange reserves total over US$10.4 billion—a number that excludes the Heritage and Stabilisation Fund, which holds another US$5 billion—and its current account shows a healthy balance of 11.5 per cent of GDP. (A country’s current account consists of the balance of trade, net factor income (earnings on foreign investments minus payments made to foreign investors) and net cash transfers.)




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