Country Report Trinidad and Tobago October 2009

Summary

The already low popularity of the prime minister, Patrick Manning, will be eroded further by the economic downturn and the public's perception of corruption within his government.
Although adverse economic conditions will create policy challenges for Mr Manning's administration, his party's parliamentary majority will avert the threat of legislative gridlock.
Owing to the impact of the global recession, real GDP will contract by 2.7% in 2009, the first recession since 1993. A mild global economic recovery will help to lift GDP growth to 1.2% in 2010 and 1.9% in 2011.
Inflation will continue to fall in the remainder of 2009, to a year-end rate of 3.7%, but supply-side bottlenecks and higher global commodity prices will again raise inflationary pressures in 2010 and 2011.
The exchange rate will remain around its quasi-fixed level of TT$6.3:US$1 throughout the outlook period, supported by a strong reserves position.

The government has come under criticism following the announcement of a new property tax regime in the September budget address.
A high-profile public enquiry into the awarding of state construction contracts was temporarily suspended in early October, prompting a public outcry. The commission's final report is expected to be delayed by legal challenges.
With the opposition in disarray, renegade members of the main opposition United National Congress (UNC) have made overtures towards the Congress of the People (COP), a UNC splinter party.
Following cumulative cuts of 200 basis points since March, the monetary policy committee cut the overnight repurchase (repo) rate by a further 50 basis points (to 6.25%) in September in an attempt to spur domestic demand.
Annual consumer price inflation fell to 4.3% in August (from 5.9% in July), the lowest level since September 2004, as food prices—the category with the highest weighting in the consumer price index—continued to ease.
Lower inflation and reports of a global recovery have boosted consumer confidence, although expectations continue to reflect a relatively pessimistic outlook.
Trinidad and Tobago's ranking in the World Economic Forum (WEF) Global Competitiveness Index has improved. The country was ranked 86th (of 130 countries) in the WEF's 2009 report, having risen from 92nd position in 2008.

This report covers the following industry codes:
SIC Code: 60;10;47
NAICS Code: 52;212;48