2007 - Central Bank of Trinidad and Tobago

CENTRAL BANK OF TRINIDAD & TOBAGOANNUAL ECONOMIC SURVEY 2007INTERNATIONAL TRADEAND PAYMENTS(All values in this section are expressed in US dollars)BALANCE OF PAYMENTSFollowing an overall surplus of 5.8 per cent of GDP in 2006,Trinidad and Tobago’s external transactions produceda surplus $1,541.1 million or 7.4 per cent of GDP, whichbrought the year-end level of gross official reserves to justover $6.7 billion, equivalent to 9.4 months of prospectiveimports of goods and non-factor services. The surpluson the external current account increased significantlymainly reflecting the continued strong performance onthe merchandise trade account, which recorded netearnings of $5.7 billion. In contrast, the capital accountrecorded a deficit as outflows linked to regional bondissues reached just under $0.3 billion and allocationsamounting to $0.4 billion were made to the HeritageStabilization Fund. In addition, outflows as a result of investmentsabroad by domestic firms almost doubled.Current AccountThe external current account recorded a surplusof $5,380.9 million or 25.7 per cent of GDP in 2007,compared with $4,808.7 million or 25.1 per cent of GDPin 2006. Despite a fall off in earnings from mineral fuelsexports as a result of lower crude oil export volumes,total exports were 10.7 per cent higher than in 2006.Mineral fuels and lubricants exports earned $8,848.2million, 18.3 per cent less than the $10,833.5 millionearned in 2006. However, higher prices obtained forammonia, urea and methanol saw chemical exportsgrowing by $639.1 million to $2,762.3 million. Exports ofmanufactured goods increased from $661.4 million in2006 to $683.8 million. In the context of the buoyancyof the local economy, falling unemployment and risingincomes, imports continued to rise, reaching $7,669.9million in 2007, and exceeded the 2006 level by 12.1 percent. Consumer goods imports increased by 19.5 percent, while higher refining activity and increased pricesfor crude oil were reflected in an increase of about 17per cent in the value of crude oil imports. Capital goodsimports fell by about 4 per cent, which may have beeninfluenced by the slowdown in construction of newplant installations in the energy sector during the year.Capital AccountThe capital account recorded a deficit of $3,505.3million (-16.7 per cent of GDP), about 10 per cent higherthan in 2006. Bond issues on the local market by regionalentities, which over the years has been a sizeable sourceof outflows on the capital account, totaled $272 millioncompared with total issues of $199.9 million in 2006.Net inflows from foreign direct investment increasedto $830 million as there were no outward foreign directinvestment flows in 2007. Commercial banks reducedtheir net holdings abroad as their net foreign positionfell to $88.2 million following a substantial build-upof net foreign assets of $844.6 million in 2006. “Otherprivate” capital flows increased during the period asthe private sector continued to diversify its portfolio andspread its risk by holding assets abroad. Official capitaltransactions during 2007 registered a deficit of $375million, compared with $592 million in 2006.62