Last update: 08-Dec-2013 11:38 pm
Sunday, December 08, 2013
Trinidad & Tobago Guardian Online
You are here
Growth for T&T after years of decline
After three successive years of decline from 2009 to 2011 and a small recovery last year, the T&T economy is expected to record growth of 1.6 per cent this year, according to the Review of the Economy 2013, one of the documents released along with the 2013/2014 budget. According to that publication, T&T’s recovery will gain momentum across a widening range of economic sub-sectors resulting in an overall growth rate of 2.5 per cent in the non-petroleum sector. The services sub-sector is also expected to exhibit continued strengthening. The forecast is for energy sector output to grow by 0.5 per cent—an improvement on the contractions experienced in 2011 and 2012. The performance of gross domestic product (GDP) at the sub-sector level is expected to be mixed, reflecting a turnaround in natural gas refining, exploration and production, as well as the growth momentum carried forward by service contractors. Headline inflation on a year-on-year basis for the first six months of 2013 remained moderate, settling at 6.8 per cent in June and reflecting a general downward trend in price levels, following a 30-month high of 12.6 per cent in May 2012.
Unemployment fell to 4.9 per cent in the third quarter of fiscal 2012 from 5.4 per cent in the second quarter. Most industries, with the exception of construction and petroleum and gas, registered unemployment rates below the national average. In light of subdued economic growth and relatively stable core inflation, the Central Bank maintained an accommodative monetary policy stance in an effort to boost the pace of economic activity. The Repo rate was reduced from 3.0 per cent in August 2012 to 2.75 per cent in September 2012, where it remained up to June. The basic prime lending rate of commercial banks dropped from 7.8 per cent in June 2012 to 7.5 per cent in June 2013. Interest rates on time loans also declined from 7.75 per cent in June 2012 to 7.5 per cent in May 2013 along with the weighted average deposit rate, which dipped further to 0.02 per cent in June 2013, from 0.2 per cent in June 2012.
In light of accumulation of excess liquidity within the financial system, the Central Bank introduced various measures to address the situation, including withdrawal of $200 million from the financial system through the issue of Treasury Bills and Notes and, in May, issuance of a $1.0 billion Treasury bond. Net Public Sector Debt stock is expected to increase by 6.9 per cent from $69,156.8 million in 2012 to $73,916.8 million this year. As a percentage of GDP, it is projected to decrease from 45.0 per cent in 2012 to 44.7 per cent in 2013. The Net Asset Value of the Heritage and Stabilisation Fund (HSF) rose to approximately US$5 billion following an injection of US$42.5 million by Central Government in the third quarter of fiscal 2013. The Balance of Payments account recorded a deficit of US$622.1 million in 2012, a reversal from the surplus of US$752.6 million in 2011. This reversal stemmed from deterioration in the external current account by 66.9 per cent mainly due to decline in the merchandise trade surplus. The capital account continued to show signs of improvement as the deficit was narrowed by 26.3 per cent.
A total of US$9,200.7 million in Gross Official Reserves or 10.4 months of import cover is estimated to have been held by the Central Bank up to the end of 2012.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff. Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Please help us keep out site clean from inappropriate comments by using the flag option.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments. Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.