The Central Bank says the loss of oil output due to the oil spills in Trinidad's south western peninsula did not adversely affect production activity in the energy sector in the fourth quarter of 2013.
"Notwithstanding the environmental effects of the oil spills in the Gulf of Paria which are yet to be fully assessed, the loss of output did not significantly affect activity in the oil sector. Initial media reports suggest that roughly 7,500 barrels of oil were spilled, equivalent to less than 10 per cent of average daily oil production in the fourth quarter of 2013," the bank reported
In its latest monetary policy announcement yesterday, the Central Bank said the energy sector returned to positive growth that quarter, following the completion in September of maintenance works by the two major natural gas producers and the downstream industry."This rebound in the energy sector, coupled with the expected continued growth in the non-energy sector, suggests that the domestic economic recovery is continuing to gain traction," the bank said.
"Core inflation was well contained towards the end of 2013. However, liquidity levels in the banking system remained elevated and by November 2013 business lending had contracted for an entire year."The 'Repo' rate is being maintainedat 2.75 per cent."
Latest data showed that natural gas output was more than 8 per cent higher than output in the previous quarter. The Central Bank said this "had significant knock on effects to the downstream industry" and methanol and ammonia production were higher by 20 per cent and 11 per cent respectively.
The report continued: "Growth in private sector credit remained relatively steady in November 2013, supported by a noticeable uptick in consumer lending. On a year-on-year basis, private sector credit extended by the consolidated financial system rose by 3.4 per cent in November 2013, down slightly from 3.5 per cent in October 2013.
"In recent months there has been a notable expansion in consumer lending. On a year-on-year basis to November 2013, consumer loans grew by 7.5 per cent, the fastest growth rate recorded in more than two years. Growth in real estate mortgage loans also remained robust, expanding by nearly 14 per cent in November 2013. Business lending, however, contracted for the twelfth consecutive month, falling by just over 4.5 per cent in November 2013."
The Central Bank also said that liquidity levels in the banking system, while still relatively high, had fallen over the last few months. Commercial banks' excess reserves fell to a daily average of $6.4 billion over the period January 2–24, from a daily average of $7.1 billion in December 2013 and a record daily average of $8.4 billion last September.
For first three weeks of January, there was a small net domestic fiscal injection of approximately $75 million compared with an injection of $739 million in December. The Central Bank rolled over a $1.5 billion special deposit that became due in December. Its open market operations and sales of foreign exchange to authorized dealers helped to remove some of the excess liquidity from the financial system.
"Given the recently approved increase in the borrowing limits under the Treasury Bills and Treasury Notes Acts, the Central Bank will be intensifying its liquidity management operations in the coming months," the bank said
The report continued: "According to the latest available data from the Central Statistical Office there was an up-tick in headline inflation in December 2013. On a year-on-year basis, headline inflation accelerated to 5.6 per cent in December 2013, from 4.4 per cent in November 2013 and a low of 2.7 per cent in October 2013. Core inflation remained unchanged at 2.0 per cent (year-on-year) in December 2013.