Retired members of the Transit Police Unit yesterday protested the non-payment of gratuity to them from 2009 to 2015.
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First Citizens banker: Business borrowing up 3%
T&T is still in a good position despite the gloomy global outlook and uncertainty, says Sana Ragbir, assistant general manager, First Citizens Investment Services Ltd. She outlined several factors that contributed to T&T’s positive position, critical among them was that business borrowing is on the rise. “Twenty-three months prior to October 2011, business borrowing was on a constant decline. But over the last two months, this has changed. It’s up to three per cent,” she said. “This is a good sign because it shows that businesses may be expressing optimism in the local economy and we hope this trend continues.” Ragbir said at the end of 2011 the excess liquidity in the banks amounted to $6 billion, which resulted in interest rates declining.
In its January 27 repo rate report, the Central Bank stated that excess commercial bank deposits averaged more than $5 billion in the months of November and December. Since T&T had been negatively impacted by the 2008 global crisis, the business community has adopted a wait-and-see approach to see how Government would treat with the crisis. This resulted in little to no investments being made by the business community because of declining confidence in the economy. The repo rate report stated that business lending, which recorded in October 2011 its first year-on-year increase in 23 months, picked up momentum in November, rising by 2.7 per cent (year-on-year).
Ragbir, who was speaking yesterday at The Global Market Outlook: What will 2012 Hold for Investors Conference, gave the business community and investors hope. The conference, which was hosted by First Citizens Investments Services, was held at the Hyatt Trinidad Regency hotel, Port-of-Spain. Other positive economic factors Ragbir identified were:
• The prime lending rate is on the decline: it’s at 7.75 per cent, while the repo rate is at three per cent “It is our hope that the Central Bank continues to reduce the repo rate as it would help in stimulating the economy;”
• Real estate borrowing continues to be at an average of 9 per cent. There has been no significant dip in this area compared to the United States
• Consumer credit is moving from a negative position to positive
• Consumers are taking loans to finance other things than house acquisition
Ragbir said she is optimistic that there would be some positive growth in 2012. “Even though there was some level of contraction, we expect positive growth for 2012.” She boasted that T&T is an enviable position compared to its regional peers because the country has accumulated close to US$10 billion in foreign reserves. “While other countries in the Caribbean have weeks of import cover, we have about 12 months.” Regarding the natural gas prices, she explained that for 2011, T&T was able to sell its natural gas at US$3.10, an increase from the Henry Hub price of US$2.75. She pointed out that unemployment is expected to decline based on the number of projects the Government has outlined for and started in 2012.
The decline in unemployment is premised on:
• US$400 million CariSal project expected to create 200 jobs
• The methanol AUM 2 plant for melamine production: US$1.9 billion, to create close to 3000 jobs
•The $7 billion San Fernando to Point Fortin highway
Regarding T&T exchange rate, Ragbir said she expects the rate of depreciation to decline. Countries’ debt to gross domestic product (GDP) ratio seems to be a major issue. “T&T’s debt to GDP ratio levels are also high, roaming around 36 per cent and is expected to increase to 40 per cent,” Ragbir said.