Trinidad's Central Bank report notes continued economic growth for first half of 2013
Growth predictions for Trinidad’s economy materialised partially in June when the Central Bank’s midyear Summary Economic Indicators Bulletin announced estimated growth of 1.6 percent during the first half of 2013.
In May, the International Monetary Fund’s (IMF) 2013 Regional Economic Outlook Report predicted that Trinidad’s economy would grow by 2 percent over 2013. Central Bank governor Jwala Rambarran was even more optimistic in his April Monetary Report, expecting 2.5 percent growth.
The Bank’s bulletin reviewed domestic, regional and international developments such as GDP growth and financial operations for the first six months of 2013.
The Summary Economic Indicators Bulletin also affirmed Central Bank expectations of increased growth in the non-energy sector. Thanks to increased production in construction, manufacturing, financial services and distribution, the non-energy sector grew 2.5 percent from January to June, falling short of earlier projections of 3 percent growth. Manufacturing alone grew 6.1 percent.
The energy sector also saw a marginal increase of 0.5 percent because of increased natural gas and LNG production, the bulletin reported. However, scheduled maintenance activity among energy providers may affect this rate of improvement in the latter half of the year.
The bulletin notes that Trinidad’s macroeconomics continue to improve; total inflation has dropped from 11 percent in June 2012 to 6.8 percent in June 2013. Food-price inflation also slowed marginally within the first six months of this year, dropping from 12.7 percent in December 2012 to 12.6 percent in June 2013. This is a huge improvement from June 2012’s food-price inflation rate of 24.1 percent.
Listed businesses are doing well; the domestic stock market showed a gain of 5.3 percent from June 2012 to June 2013.
Bank liquidity is climbing and commercial lending rates decreased from 7.75 percent to 7.50 percent, causing an upswing in consumer loans. But despite lower lending rates, the number of business loans is still declining. The mortgage lending market remains healthy.
The Bank noted a disturbing upward trend in retrenchment during the first half of 2013; 19.3 percent more retrenchment notices came in from January to June 2013 than for the same period last year.
The bulletin includes confirmation of 1.3 percent growth in the Caribbean from January through June 2013, according to the IMF. The Fund expects Caribbean economies overall to improve to a 2 percent growth rate by the end of the year, and the IMF was particularly optimistic about growth in commodity-based economies such as those of Guyana and Belize.
The Central Bank’s bulletin affirmed its optimism for this growth, predicting growth rates of 5.3 percent and 2.5 percent, respectively, for Guyana and Belize in 2013. But tourism-based economies in Barbados and Jamaica continued to decline in early 2013, the bulletin said.