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Central Bank on T&T economy: Mixed 2014 performance
The T&T economy, which had been growing at a slightly faster-than-expected pace last year, had a mixed economic performance in the first three months of 2014. In its latest monetary policy announcement, the Central Bank of T&T (CBTT) said while the non-energy sector maintained its growth momentum into 2014, the rebound in the energy sector in the fourth quarter of 2013 did not fully carry over into the early part of this year. “Two events temporarily affected energy production in the first two months of 2014. BPTT took down its Savonette Platform to accommodate drilling at another well and Petrotrin undertook planned maintenance at its Pointe-a-Pierre oil refinery,” the CBTT said in the report released yesterday. “However, energy output bounced back by March 2014. As a result, natural gas output fell 2 ½ per cent (year-on-year) during the first quarter of 2014 while crude oil output slipped by just over 2 ½ per cent over the same period. Meanwhile, both methanol and fertilizer experienced higher production in the first quarter of 2014.”
The CBTT said initial indicators suggest a favourable outturn in the non-energy sector in the first three months of 2014. Local cement sales increased by around 7 ½ per cent and new car sales rose by more than 12 ½ per cent in the first quarter of 2014, suggesting that the construction and distribution sectors maintained their growth momentum. “Borrowing by businesses also encouragingly picked during the first quarter of 2014 from a year-long decline. Core inflation remained low and stable in April 2014. Nevertheless, with strengthening economic activity and increasing consumption, inflationary pressures are likely to build in the coming year,” the bank said. Private sector credit growth has strengthened and became more balanced so far this year.
“Notably, as a sign of improving corporate activity, business lending emerged from a year-long decline, posting growth of a little over 2.0 per cent in February 2014 and increasing further by close to 3 ½ per cent in March 2014. Consumer loans maintained a relatively robust rate of expansion, growing by nearly 6.0 per cent in March 2014. Consumer lending was driven by motor vehicle loans and loans for home renovations, while there was a pick-up in outstanding credit card balances. Real estate mortgage lending continued to post double-digit growth rates in February and March 2014.”
The CBTT said headline inflation was relatively subdued in the first four months of 2014 and latest available data from the Central Statistical Office show that on a year-on-year basis it slowed to 3.3 per cent in April. “Following an up-tick in March 2014 to 2.7 per cent, core inflation slowed slightly to 2.6 per cent in April 2014, but was still higher than the 2.0 per cent recorded at the end of 2013. Food inflation continued to slow, measuring 4.1 per cent in April 2014 compared with 6.7 per cent and 10.2 per cent in March 2014 and December 2013, respectively,” the bank said.