PORT OF SPAIN, Trinidad -- While the Trinidad and Tobago Central Bank maintains its outlook of 2.5 percent growth for the local economy, it has indicated some concern regarding risks in the energy sector.
In the Bank's July 2013 Economic Bulletin, the report indicated the recent up-turn in domestic economic activity, particularly in the non-energy sector indicates that economic sentiment is gradually improving.
"While the growth forecast of 2.5 percent for the domestic economy is being maintained, significant downside risks emanate from the energy sector. In the first four months of 2013, output in the energy sector, though generally higher than a year ago, was much weaker than expected. This has dampened the overall outlook for the energy sector, particularly in light of the planned maintenance operations at two major gas producers and several downstream plants scheduled for the third quarter of 2013."
The Bank indicated that economic growth is expected to be driven by the non-energy sector, particularly the construction, distribution and finance sectors.
It pointed to several private sector projects which, depending on the pace of project implementation, may provide a fillip to economic activity in the second half of 2013.
These include a $500 million joint venture between JT Allum Group of Companies and Multi-cinemas Trinidad Limited to develop the ‘C3’ movie and shopping complex along with Ansa McAl’s $400 million clay plant which should boost production of clay products.
The Bank made note of a slight improvement in the energy sector activity in the first quarter of 2013, following maintenance-related outages in the previous quarter.
The bulletin noted that data from the Ministry of Labour, Small and Micro-Enterprises indicated a 19.6 percent increase in the number of retrenchment notices filed in the first half of 2013 when compared with the corresponding period in 2012.
On a year-on-year basis to June 2013, headline inflation measured 6.8 percent compared with 7.2 percent in December 2012 and 11.0 percent in June 2012.
Core inflation, which excludes volatile food prices, has been well contained ranging between 2.1 percent and 2.4 percent in the first six months of the year. Meanwhile, food price inflation also slowed. Food inflation measured 12.6 percent in June 2013 compared with 12.7 percent in December 2012 and 24.1 percent in June 2012.