Central Bank projects growth for T&T economy

Central Bank Governor Jwala Rambarran is optimistic about T&T’s economy for 2013.

“I was cautiously optimistic about the prospects for this year. I have not changed that assessment. We at the Central Bank are actually projecting growth of 2.5 per cent in 2013,” he said yesterday at the presentation of the Central Bank’s Financial Stability Report for December 2012.

“There are a number of actions that have taken place over the course of the last year that has set the economy on a firmer growth path. That in itself should provide an overall boost to confidence. 

“In relation to the Clico issue you have the launch of the Clico Investment Trust. That has put a considerable part of the anxiety created by Clico behind us. We have seen the economy show tremendous resilience in the face of the global fallout. Also, our financial system has been resilient in the face of a harsher domestic environment. When you add those positives there are enough to suggest out prospectives are pretty favourable,” he said.

Rambarran also commented on a Market Facts and Opinion Survey about a better perception of the economy which showed that 26 per cent of respondents now have a favourable opinion of the economy—an increase from 2011.

He said it was encouraging that there was positive news about the economy as it filters through the system and creates a better investment climate.

Rambarran added that T&T’s economic performance comes against the backdrop of fragile global economic recovery.

“The global economic recovery was set back by the intensification of the sovereign debt and the banking crisis in the Euro area and the fiscal situation in the US. Growth faltered in the US around June but picked up later on in the year. In the Caribbean many of our peers continue to struggle with low growth and very high public debt levels,” he said.

Dr Alvin Hilaire, chief economist at Central Bank, said there were signs of a turn around in the T&T economy as early as the third quarter of 2012.

“The preliminary numbers show that we do have some growth of close to 1.5 per cent which is encouraging as it comes after several quarters of contraction of the energy sector. Natural gas output has been moving up. On the non energy sector there was also growth and the problems like Trinidad Cement Limited (TCL) had stopped. This augurs well for the future and will be spread out among the economy,” Hilaire said.

The report showed that the banking system remained well capitalised  despite a sluggish economy and non-banking financial institutions have been affected more by the slower economic environment.