Contact Magazine - Transforming Trinidad & Tobago

transforming the state of the t&T nation
Economic Outlook
A return to growth in
2018?
Speaking to the nation on
television and radio in
January, prime minister
Keith Rowley promised “a
slow return to growth” in 2018. The
international agencies back him up. In
its latest country report for Trinidad
and Tobago (November 2017), the IMF
projected real GDP growth at 1.9 per
cent this year. The CDB’s forecast was 1 2016
per cent; UN ECLAC was less optimistic,
forecasting a more conservative GDP
growth rate of 0.5 per cent.
The IMF predicted 7.7 per cent
growth in the energy sector, thanks to
the contributions of Juniper and the
Trinidad Onshore Compression Project
(TROC). But it thought the non-energy
sector likely to contract by 1.2 per cent
– cause for concern, as that sector makes up around 65 per
cent of GDP, and non-energy export growth is vital for the
country’s future.
In estimating energy output for 2018, the IMF put the
new norm of natural gas production in the range of 3-4 bcf
per day, while oil production was expected to continue its
decline, hitting record lows of 60,000-70,000 barrels per day.
n of crude (bpd)
s (bn cf)
3.3
3.8
as a percentage
t revenue
3.0
16
Latin $3.7 America and Caribbean
Overall, Latin America and the Caribbean are expected to see
about 1.9 per cent growth in 2018. According to the IMF,
growth in Central America has been strengthening; but in the
2017
Caribbean, domestic demand is expected to underperform,
with growth of 2.3 per cent for tourism-dependent economies
and 2.0 per cent for commodity exporters.
n Khan at 2017 Energy Conference
Debt to GDP ratio
Debt
In Antigua and Barbuda, Grenada, Jamaica, and St Kitts and
Nevis, government debt-to-GDP ratios have been declining,
reflective of fiscal discipline and debt restructuring. However,
Barbados, The Bahamas, Suriname and Trinidad and Tobago
failed to sufficiently address their stubborn fiscal deficits
and high debt levels, leading to downgrades by international
credit agencies in 2016-17.
According to the IMF, public sector debt remains a major
vulnerability for the region. Barbados and Jamaica still have
debt levels of over 100 per cent of GDP (102.7 and 109.5 per
cent for 2017, respectively). However, they both reduced their
debt levels, as did Antigua and Barbuda, Dominica, and St Kitts
and Nevis. Declines in commodity prices exposed weaknesses
2017
Trinidad & Tobago GDP growth
3
2
1
0
-1
-2
-3
-4
-5
-6
2013
2014
2015
2016
Caribbean Sustainable Energy Roadmap and
Strategy (C-SERMS) RE goal:
20% by 2017
T&T RE goal:
vital for the country’s future
28% by 2022
47% by 2027
10% by
in the fiscal policies of commodity exporters such as Trinidad
and Tobago and Suriname, leading to large fiscal 2021 deficits and
increases in public debt.
“Renewable sources of energy are the way forward”
– Robert Le Hunte, Public Utilities Minister, January 2018
2017
Non-energy export growth is
The global outlook
In its World Economic Outlook Update for January 2018, the
IMF estimated global economic growth for 2018 at 3.9 per
cent, a slight improvement of 0.2 per cent over the previous
October’s forecast. This continues the global economic trend
of steady but modest recovery since 2016.
US and UK
The US economy was projected to grow by 2.7 per cent in 2018
and 2.5 per cent in 2019, following reforms to US corporate
and personal income taxes approved in December 2017.
The Brexit aftermath has created much uncertainty over
issues like trade and cross-border financial activity, which
impacts the growth prospects of the United Kingdom. UK
economic growth remains sluggish, and is projected at 1.5 per
cent in 2018.
China and Russia
China’s economy is expected to grow by 6.5 per cent, which is
an upward revision of 0.2 per cent as a result of a continued
expansionary policy.
In an attempt to clear the existing supply glut of oil, both
OPEC and Russian-led non-OPEC producers are expected to
extend production cuts to the end of 2018. The resulting oil
and natural gas production levels are expected to produce a
higher-priced environment as 2018 progresses.
38
Trinidad
and Tobago Chamber
of Industry and Commerce
www.chamber.org.tt/contact-magazine