Country Report Trinidad and Tobago February 2009

Outlook for 2009-10

• The already low popularity of the prime minister, Patrick Manning, will be eroded further by the economic downturn and the worsening violent crimesituation.
• Policymaking will become more challenging in 2009-10 as the deterioration of the fiscal and current-account balances leaves Trinidad and Tobago exposed to global financial and economic woes.
• After slowing in 2008 to 3.5%, GDP growth will weaken further in 2009 to 0.9% as the global recession bites. A mild global economic recovery will help to lift GDP growth to 1.9% in 2010.
• Supply-side inefficiencies and loose fiscal policy preclude a rapid decline in inflation, but on the assumption of weaker commodity prices and private consumption, we expect inflation to ease to an average of 7.2% in 2009-10.
• The exchange rate will remain around its quasi-fixed level of TT$6.3:US$1 throughout the forecast period, supported by a strong reserves position.

Monthly review

• An enquiry into the construction industry began in mid-January. The findings of the enquiry could be politically damaging for the government if evidence of corruption is uncovered.
• The prime minister presented a working document on constitutional reform to the lower house of parliament; given the current balance of power in parliament, there is little probability that the document will be adopted.
• The governing People's National Movement (PNM) retained control of the Tobago House of Assembly in elections held on January 19th, winning eight out of 12 seats.
• Only six weeks after lowering its 2008/09 (October-September) budget projections, the government announced another revision to reflect further declines in global energy prices.
• Annual consumer price inflation eased slightly in November. The consumer price index rose by 0.3% in November, the lowest month-on-monh rise since February, lowering 12-month inflation to 14.3% (from 15.4% in October).
• Growth in credit to the private sector has continued to slow, rising by 15.2% year on year in October compared with average year-on-year growth of 21% in January-September.
• The energy sector has begun to feel the impact of falling global energy prices and the freezing of international credit lines; some energy producers have been forced to suspend operations or bring forward maintenance work.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49
NAICS Code: 22