International Monetary Fund. Western Hemisphere Dept.
This 2013 Article IV Consultation highlights that the economy of Trinidad and Tobago is poised for a modest recovery in 2013, after disappointing growth in 2012 that was owing to largely supply constraints, including maintenance operations in the energy sector and an industrial dispute in the nonenergy sector. The IMF staff projects real GDP growth of some 1.5 percent in 2013, with risks slightly to the downside, should development spending be under-executed. Headline inflation rose to 9.3 percent in 2012. Executive Directors welcomed the signs of economic recovery, fueled by growth of the nonenergy sector.
The economic slowdown as a result of the global crisis has been severe, and the recovery has not yet taken hold. Despite ample buffers, including large fiscal space and strong international reserves, the policy response to the crisis has been constrained. Inflation has resurfaced as a concern after falling to a historical low in 2009, but the data are misleading. The monetary policy stance has been generally supportive but ineffective in the context of large excess liquidity. Medium-term growth prospects depend on the energy sector outlook.
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