Business

The Enabling Competitive Business Strategy (ECB) 2011-2014

The ECB is a medium-term four year plan developed by both public and private sector stakeholders to address some of the key challenges that hinder the ability of Trinidad and Tobago’s businesses and by extension the economy to compete globally.  

The Strategy is not a panacea for all the ills that thwart the local business community. It is a feasible plan of action that captures in one single instrument, the necessary interventions sanctioned by public and private sector stakeholders to build a competitiveness supporting economic environment......
source: Ministry of Labour, And Small and Micro-Enterprise Development

Overview of Economic Developments in 2010

According to the TT Annual Economic Survey 2010: Review of the National Economy, in 2010 the global economy slowly emerged from recession. While economic conditions improved in developed countries, still elevated unemployment rates provide evidence that there is not yet sufficient momentum to support a self-sustaining recovery.

Following a contraction of 3.5 per cent in 2009, economic growth in Trinidad and Tobago remained relatively flat in 2010 (Tables 1 and 2). Although the energy sector experienced moderate growth, the non-energy sector continued to decline, albeit at a slower rate than during the previous year.

ECONOMIC OUTLOOK FOR 2011
The global economy is likely to continue its slow recovery in 2011. While several downside risks still remain, one of the most important risks is further financial turmoil in Europe. The continued global recovery is therefore heavily reliant on the implementation of policies to improve fiscal imbalances whilst restoring confidence and stability. In advanced economies, inflation is projected to remain low due to substantial resource slack, while unemployment levels are expected to remain considerably high. Following a challenging year, the Trinidad and Tobago economy is anticipated to return to growth in 2011. In FY 2010/2011, government funds have been designated to provide further stimulus, including sizeable transfers to households and incentives to encourage business activity..........
source: Central Bank of TT

TT. Financial Stability Report: Mid-Year Review, June 2011

The Mid-Year Review states that the economic environment in which financial institutions in Trinidad and Tobago operated for most of 2010 and into early 2011 was relatively sluggish. The bright spot continued to be the energy sector, although during the last quarter of 2010 maintenance work depressed output levels in several companies in the sector. Meanwhile, there was little evidence of a revival in distribution and construction activity from the depressed levels of 2009, while agriculture was hard hit by drought and subsequent floods.

Macro-economic Developments
The domestic economy continued to display signs of sluggishness in 2010, with real GDP provisionally estimated to have declined marginally by 0.6 per cent, following a 3.5 per cent contraction in 2009 (Table 1.1). The energy sector expanded by 1.7 per cent notwithstanding somewhat lower output of petrochemicals. Meanwhile, the non-energy sector continued on its downward trajectory, posting a decline of around 2.3 per cent, as construction and distribution activities slipped further during the year while weatherrelated supply shocks disrupted domestic agricultural production........
source: Central Bank of TT

Climate change economics on a small island: new approaches for Tobago

by Tom Birch and Murray Simpson.
For small islands like Tobago — that depend heavily on tourism driven by their natural ‘beauty’ — climate change poses a double-edged threat on supply and demand. Rising sea levels, increasing temperatures and more frequent and intense storms will damage the island’s natural assets, such as coral reefs and beaches. This could have a heavy impact on tourism, which will also be affected by climate policy  in ‘source’ countries. But what exactly will that impact be? How much will it cost ? And what can be done about it..........
source: IIED Briefing. January 2011

Economic Review

TT Budget Statement 2010. Strengthening Efficiency, Addressing the Challenges’
Mr. Speaker, I now turn to a review of our economic performance for fiscal 2009 which was a challenging year for the Trinidad and Tobago economy. For 2008 as a whole, economic growth measured 2.3 percent. The annual growth rate does however, mask the economic slowdown which began towards the end of 2008 and has continued in 2009.

Real GDP is estimated to have declined by 1 percent in the last quarter of 2008, and this decline continued in the first quarter of 2009, when real GDP fell by 3 percent. Several other indicators including falling retail sales, declining construction activity, and contracting private sector credit, seem to suggest that the decline has continued beyond the first quarter. This is projected to be our first year of negative growth since 1993.
source: Government of Trinidad and Tobago

General Trends

According to ECLAC's flagship report 'Economic Survey of Latin America and the Caribbean 2009-2010', the international economic crisis closed a cycle of robust growth and massive twin surpluses in Trinidad and Tobago, a country which had benefited greatly from the escalation in international oil prices in recent years. Sharp contractions in the construction and commerce sectors led to a 0.9 percentage point decline in GDP compared with 2008, the first dip since 1993. From the fourth quarter, however, there were tepid signs of a recovery, which continued throughout the first quarter  of 2010, in tandem with a rally in the energy sector spurred by more buoyant international prices. The central bank forecasts 2% growth for 2010.
source: ECLAC

Economic Performance

According to ECLAC's Preliminary Overview of the Caribbean economies 2008-2009, after several years of benefiting from an extraordinarily favourable external context due to the surge in world hydrocarbons prices, the global economic and financial crisis represents a turning point for the economy of Trinidad and Tobago. In 2008 growth slowed to an estimated 3.5% compared with 5.5% in 2007. The turmoil also brought about a reduction in the trade and current account surpluses, in the context of a significant rise in inflation (14.5% in December year-on-year). During 2008 the economic policy mix continued to combine an expansive fiscal stance based on dynamic public investment with a monetary policy focused on withdrawing excess liquidity generated by public spending within a quasi-fixed exchange rate regime.

Economic policies will continue to be guided by the Vision 2020 national development plan. The year 2009 will undoubtedly posit a number of challenges on the economic front that can be summed up as the reduction of dependency from the energy sector that generates more than 45% of output, between 85% and 90% of merchandise exports, and above 55% of fiscal revenue. Growth is forecast in the range of 1% to 2% for 2009.
source: ECLAC

Economic and Financial Developments

Press Statement Issued by the IMF Mission for the 2008 Article IV Consultation Discussions with Trinidad and Tobago. November 17, 2008

According to the IMF Mission team, benefiting from a booming energy sector, Trinidad and Tobago has achieved an impressive improvement in economic indicators. During 2002-07, real GDP growth averaged 9 percent; per capita income doubled in U.S. dollar terms; both the unemployment rate and the public debt ratio were halved; and the country became a net external creditor, with one of the strongest credit ratings in the region. At the same time, record high energy prices have fueled government spending, leading to capacity constraints in the non-energy sector and, together with rising food prices, to double-digit inflation

Economic Review

Mr. Speaker, this year’s Budget Statement 2008/2009 is set against a robust and resilient economy. Our country has benefited from sound economic management that has brought steady growth and development and this Budget follows the long tradition of prudent economic management that has characterized this Government.

GDP has almost tripled from $55 billion in 2001 to $152 billion in 2008. It is
projected to rise to over $165 billion in 2009. Mr. Speaker, this is an incredible performance even by global standards.

As part of our economic strategy we have announced plans for deeper industrialization,involving downstream energy sector spinoffs and for intensified focus on economic diversification. Agriculture was also identified as a priority sector to address the urgent challenge of food price inflation and to contribute to the achievement of food sufficiency.

In the social sectors, our strategy for the next five years recognizes the need to continue to provide affordable housing, especially for low income households; and to pursue further improvements in health care, emphasizing accessibility and affordability.

Economic Survey of the Caribbean 2007-2008

The survey provides an overview of the economic performance of countries of the Caribbean Development and Cooperation Committee (CDCC) for the year 2007 and their outlook for 2008. The last chapter presents country briefs with the main macroeconomic developments in 2007 and the outlook for 2008.

Trinidad and Tobago’s economy recorded a marked slowdown growing by 5.5%, well below the impressive 12.2% posted in 2006. This was mainly explained by the sharp decline in the dynamism of the energy sector that accounts for more than 40% of GDP.
On the economic policy side, rapid growth in capital spending associated with public infrastructure projects made fiscal policy rather expansionary resulting in a reduction of the fiscal surplus to 2.6% of GDP in fiscal year 2006/07 (6.9% in fiscal year 2005/06). In order to offset the impact of fiscal policy on prices, monetary policy was conducted conservatively, recording an inflation rate of 7.6% (year end), two percentage points less than in 2006. The nominal exchange rate remained stable, but the tendency towards real appreciation continued.

 Meanwhile, the current account surplus declined by almost seven percentage points of GDP to 18.6%. General elections held in November 2007 re-elected the People’s National Movement (PNM), so no major policy changes are expected. Looking ahead, the main economic policy challenge in the coming years is how to use the current energy windfall to support long-term economic growth while at the same time expanding proven gas reserves. The government would continue to follow the basic elements of the “Vision 2020” development plan, which implies continued expansion of public investment financed by energy revenue to fund infrastructure projects and social spending.

As regards economic growth, available information indicates a GDP growth rate of 5.5-6.0% in 2008, as the energy sector is expected to recover momentum and the non-energy sector continues to be supported by government and private spending. High and rising energy prices are expected to continue feeding fiscal and current account surpluses.

Economic Statistics

Trinidad and Tobago: Statistical Appendix. January 8, 2007. source: IMF 

Economic Performance for 2006

Trinidad and Tobago experienced economic growth for the 12th consecutive year in 2006. The driving force behind Trinidad’s growth is the energy sector which increased oil and natural gas production by 16.9% in 2006. The country is the leading producer of oil and natural gas in the Caribbean and as oil prices hit a record high in 2006, the country’s GDP growth reached 12.6%. Growth was recorded in the construction and manufacturing industries as well, measuring 14.5% and 11.8% respectively. Trinidad and Tobago also enjoyed higher export volumes and firm investment growth. The economic climate of the country is ideal for international business and foreign direct investment continued to grow. The government credits the economic expansion to the liberalization of the economy and fiscal policies that were introduced.

The country’s unemployment rate dropped to 6.2% in 2006, which many consider to be close to achieving full employment. For the first quarter of 2007, this rate was estimated as 5.6%. The country has experienced a marked increase in inflation which measured 8% in 2006. This increase is primarily due to a sharp spike in food prices, diminishing agricultural output and an increase in import costs. In an effort to curb this rate of inflation, the Central Bank increased the repo rate from 6.25% in Jan 2006 to 8.0 % by year end. Early reports on inflation in 2007 show a decline in the first qtr. However, with the expectation of increasing food prices during the country’s rainy season and the anticipation that continued government spending will raise consumer demands, the Central Bank will continue to tighten monetary policy through the sale of bills and bonds and the maintenance of the current 8% repo rate.
Source:Central Bank Media Release
Source:Budget Statement 2007
Source:Ministry of Finance report on the Economy

Caribbean Economic Performance

As a whole, the Caribbean economies, recorded the best economic performance in the last 25 yrs. CARICOM’s GDP growth is estimated at 6.3%. This economic performance is low in comparison to that of the global average GDP growth for developing countries which was estimated at 6.5%. The external sector received favourable conditions with continued demand for tourism, high prices of exports and high inflow of capital. This paper gives a general overview of the economical growth of the Caribbean as well as a breakdown for each country (excluding Haiti) using preliminary data for 2006.
Source:ECLAC. Caribbean Economies 2006