The Central Bank of Trinidad and Tobago (CBTT) latest Monetary Report has explained that T&T’s economy can be further stimulated if there is an end to the interruption of natural gas production.
The report read: “economic activity could improve in the latter part of 2019 if there is a normalisation of natural gas production following temporary disruptions at mid-year.”
The bank expressed that the Ministry of Energy expects a rise in natural gas production to around 3.8 billion standard cubic feet per day (bcf/d), which would aid the rejuvenation of downstream refining and strengthen the production of petrochemicals.
According to the report, the domestic energy sector experienced setbacks in the second quarter of 2019. It said: “Natural gas production fell primarily due to production curtailments at Atlantic LNG which is a major user of natural gas.”
The CBTT contended that LNG production, which was interrupted in June by maintenance activity and power outages at the Atlantic LNG facility, is likely to normalise in the second half of 2019.
The report noted, however, that the petrochemicals sub-sector experienced a boost in the production of ammonia and urea, which largely represented a recovery from significant downtime in the comparable period in 2018.
Energy and energy-based companies, according to the CBTT are continuing to rationalize their operations in the face of increasing global competition while the Point-a-Pierre refinery operations have not yet restarted.
The higher energy revenues T&T received in the 2018/19 financial year, meant the country registered a lower deficit than in 2017/18, said the CBTT. It also explained that total revenue was higher in the 2018/19 financial year because of improved energy revenue.
Outside of the energy sector, the CBTT report added that end-of-year seasonal demand is expected to boost distribution, “while the acceleration in the pace of implementation of Government infrastructure works will spill over into construction activity.”
The CBTT said that the response of private investment will be key to determining how fast the non-energy economy recovers. According to preliminary estimates by the CBTT for the first half of 2019, activity remained moderate in the non-energy sector while activity declined in several crucial sub-sectors such as manufacturing and construction.
The report noted that the distribution sub-sector was almost flat but there was an improvement in activity in the financial sector during the period of the report.
The CBTT report said: “Overall, unlocking the potential of the non-energy sectors via structural reforms that enhance the ease of doing business, reduce administrative and other bottlenecks to investment, and engender more flexibility in market responses to global competition will go a long way to fostering durable growth.”