Country Report Trinidad and Tobago December 2008

Summary

The parliamentary majority enjoyed by the government of the People's National Movement (PNM) will enable it to enact most of its legislative agenda during the outlook period.
Policymakers are relatively well placed to mitigate any damage to the domestic economy by the global financial crisis, owing to Trinidad and Tobago's sound public finances and a comfortable cushion of reserves.
The government will continue to record fiscal surpluses, driven by the dynamism of the export-oriented energy sector, but these will fall as energy prices drop.
Labour shortages, rather than rising unemployment, will be a near-term challenge for policymakers, but weakening activity in the energy sector in the context of a global recession will dampen GDP growth in 2009-10.
On the assumption of weaker commodity prices and private consumption, the Economist Intelligence Unit expects inflation to end 2008 at 15%, before easing to an average of 9.7% in 2009-10.
The exchange rate will remain around its quasi-fixed level of TT$6.3:US$1 throughout the forecast period.

There has been rising public discontent with the government's lack of policy responses to rising crime, high food prices, and severe traffic congestion resulting from transport infrastructure underinvestment.
The rising murder rate has shown no sign of abating. There were 479 murders between January 1st and November 15th, a record high.
The government has announced that it will review its 2008/09 (October-September) budget, which was based on an oil price of US$70/barrel and a gas price of US$4/m cu ft.
Following six years of preparatory work and discussions, legislation to update and replace the 1993 Financial Institutions Act (FIA) was passed unanimously by the House of Representatives (the lower house) on November 14th.
As a result of falling energy prices, the Central Bank of Trinidad and Tobago lowered its official real GDP growth estimates for 2008 in its latest monetary policy report, released in mid-November.
A series of temporary production shutdowns in the petrochemicals sector have created difficulties for the state-owned National Gas Company (NGC).

Source: Country Report

This report covers the following industry codes:
SIC Code: 10;70;47;49;60;13
NAICS Code: 212;72;48;22;52;211