Trinidad and To­ba­go has ex­pe­ri­enced an en­er­gy-led re­cov­ery in do­mes­tic eco­nom­ic ac­tiv­i­ty dur­ing the first half of fis­cal year 2018/19 ac­cord­ing to the Cen­tral Bank’s June mon­e­tary pol­i­cy an­nounce­ment.

The Cen­tral Bank not­ed that gov­ern­ment’s deficit for the first half of the 2018/2019 fis­cal year was much low­er when com­pared to the cor­re­spond­ing pe­ri­od last fis­cal year.

“The boost to nat­ur­al gas out­put from the Ju­niper project pos­i­tive­ly af­fect­ed down­stream pro­duc­tion of petro­chem­i­cals and liq­uid nat­ur­al gas (LNG). At the same time, to­ward the end of the year, re­fin­ing out­put fell sub­stan­tial­ly as a re­sult of the clo­sure of the Petrotrin re­fin­ery.

“There were al­so main­te­nance-re­lat­ed pro­duc­tion stop­pages at some petro­chem­i­cal plants in the fi­nal quar­ter of 2018,” the re­port said.

It added that more re­cent in­for­ma­tion shows that nat­ur­al gas pro­duc­tion rose fur­ther in the first two months of 2019 with the com­ing on-stream of new gas from the An­gelin plat­form.

“LNG and petro­chem­i­cals out­put al­so in­creased while crude oil pro­duc­tion con­tin­ued to de­cline ow­ing to ma­ture acreage.

“The spillover from the en­er­gy to the non-en­er­gy sec­tors ap­peared to be slow and some­what un­even in 2018, how­ev­er, based on avail­able da­ta,” the re­port said.

En­er­gy prices dis­played pos­i­tive trends over No­vem­ber 2018 to May 2019.

Ac­cord­ing to the Cen­tral Bank strong sea­son­al de­mand over the win­ter months ac­count­ed for the rise in nat­ur­al gas prices (7.5per cent year-on-year) to US$3.16/mil­lion British Ther­mal Units (mmb­tu) over the pe­ri­od.

The Bank said lat­est da­ta in­di­cat­ed an in­crease in the un­em­ploy­ment rate to 4.8 per cent in 2017 even as the labour mar­ket par­tic­i­pa­tion rate al­so de­clined as some peo­ple opt­ed to leave the job mar­ket, per­haps as a re­sult of dif­fi­cul­ty in ob­tain­ing em­ploy­ment.

The bank not­ed that more re­cent da­ta point to a year-on-year rise in re­trench­ment no­tices filed with the Min­istry of Labour in 2018 and ear­ly 2019, sug­gest­ing a fur­ther slack­en­ing of labour mar­ket con­di­tions.

In­fla­tion how­ev­er con­tin­ued to be low and sta­ble in ear­ly 2019 due to low in­ter­na­tion­al food prices and mod­er­ate do­mes­tic de­mand. Head­line in­fla­tion stood at 1.2 per cent and con­struc­tion sec­tors boost­ed growth in 2018.

The re­port said con­sol­i­dat­ed pri­vate sec­tor cred­it, which had been ex­pand­ing mod­er­ate­ly in 2018, dipped in March 2019.

Re­gion­al­ly the Cen­tral Bank said in in ear­ly 2019 Bar­ba­dos out­put suf­fered from fall-offs in con­struc­tion and oth­er non-trad­ed sec­tors .

It added that fol­low­ing some tight­en­ing in the lat­ter part of 2018, glob­al mon­e­tary and fi­nan­cial con­di­tions have eased since the be­gin­ning of 2019 as ma­jor cen­tral banks have kept mon­e­tary pol­i­cy un­changed or have im­ple­ment­ed fur­ther ac­com­mo­da­tion mea­sures

The Bank has con­tin­ued to con­duct open mar­ket op­er­a­tions in light of chang­ing mar­ket con­di­tions.

Low­er fis­cal in­jec­tions over No­vem­ber 2018 to May 2019 rel­a­tive to the pre­vi­ous sev­en-month pe­ri­od (April to Oc­to­ber 2018) re­sult­ed in the Bank in­ject­ing a net amount of $4.2 bil­lion in liq­uid­i­ty in­to the fi­nan­cial sys­tem through net ma­tu­ri­ties of OMOs. Fur­ther­more, sales of for­eign ex­change by the Cen­tral Bank to au­tho­rised deal­ers in­di­rect­ly with­drew liq­uid­i­ty from the sys­tem. Liq­uid­i­ty lev­els over the pe­ri­od were low­er com­pared to the pri­or sev­en-month pe­ri­od, which led to in a rise in dai­ly in­ter­bank

bor­row­ing; how­ev­er, the in­ter­bank rate re­mained un­changed, the re­port not­ed.

It added the lo­cal for­eign ex­change mar­ket re­mained tight de­spite an in­crease in au­tho­rised deal­ers’ for­eign cur­ren­cy pur­chas­es from the pub­lic.

Over No­vem­ber 2018 to May 2019, both pur­chas­es and sales of for­eign ex­change by au­tho­rised deal­ers in­creased when com­pared to the cor­re­spond­ing pe­ri­od a year ear­li­er.