Abstract
The staff report for the 2008 Article IV Consultation of Trinidad and Tobago highlights economic developments and policies. Faced with a prospective decline in energy resources, the government has embarked on an ambitious development and diversification strategy. External vulnerability is low as a result of large international reserves and low debt ratios, and the banking sector has entered the period of global turmoil from a position of strength and with little reliance on external borrowing.
Appendix I. Trinidad and Tobago—Fund Relations
(As of November 30, 2008)
I. Membership Status: Joined: September 16, 1963; Article VIII.
II. General Resources Account:
| SDR Million | Percent of Quota | |
| Quota | 335.60 | 100.00 |
| Fund holdings of currency | 295.93 | 88.18 |
| Reserve position in Fund | 39.68 | 11.82 |
| SDR Million | Percent of Quota | |
| Quota | 335.60 | 100.00 |
| Fund holdings of currency | 295.93 | 88.18 |
| Reserve position in Fund | 39.68 | 11.82 |
III. SDR Department:
| SDR Million | Allocation | |
| Net cumulative allocation | 46.23 | 100.00 |
| Holdings | 0.71 | 1.54 |
| SDR Million | Allocation | |
| Net cumulative allocation | 46.23 | 100.00 |
| Holdings | 0.71 | 1.54 |
IV. Outstanding Purchases and Loans: None
V. Latest Financial Arrangements:
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
| Stand-by | 04/20/90 | 03/31/91 | 85.00 | 85.00 |
| Stand-by | 01/13/89 | 02/28/90 | 99.00 | 99.00 |
| Type | Approval Date | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
| Stand-by | 04/20/90 | 03/31/91 | 85.00 | 85.00 |
| Stand-by | 01/13/89 | 02/28/90 | 99.00 | 99.00 |
VI. Projected Obligations to Fund: (SDR Million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| Principal | |||||
| Charges/Interest | 0.49 | 0.48 | 0.48 | 0.48 | |
| Total | 0.49 | 0.48 | 0.48 | 0.48 | |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| Principal | |||||
| Charges/Interest | 0.49 | 0.48 | 0.48 | 0.48 | |
| Total | 0.49 | 0.48 | 0.48 | 0.48 | |
VII. Exchange Arrangements:
Trinidad and Tobago has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange system free of restrictions on current account transactions. The system, a de jure managed float, is classified as a stabilized arrangement under the Fund’s revised methodology.
VIII. Last Article IV Consultation and Recent Contacts:
The 2007 Article IV consultation was completed by the Executive Board on September 10, 2007, in a streamlined format (IMF Country Report No. 08/36).
Staff visited Port of Spain on July 15–18, 2008, to advise on fiscal policies ahead of the FY 2008/09 budget.
IX. Technical Assistance (Fund headquarter-based)
STA: Standardizing monetary and financial statistics, January 2008.
FAD: Setting up institutional arrangements for a Medium-term Fiscal Framework, January 2008.
MCM: Assignment of two resident experts for insurance supervision to the CBTT, starting October 2007 and February 2008.
STA: Review of national accounts statistics methodology, July 2007.
STA: Assistance to update export-import price indices, January 2007.
MFD/LEG: Assistance with drafting a new Insurance Act, and amendments to the Financial Institutions Act, 2006.
MFD: Financial sector supervision expert to advise the Inspector of Financial Institutions at the CBTT, 2006.
LEG: Strengthening and modernizing the legal framework for banking regulation and supervision, July 2006.
MFD: Assistance for a transition toward a more flexible exchange rate system, January 2006.
Appendix II. Trinidad and Tobago—Relations with the World Bank
(As of October 15, 2008)
The World Bank’s last Country Assistance Strategy for Trinidad and Tobago was discussed at the Board in 1999. The current World Bank program includes one project with total commitment of US$20.0 million, of which US$13.6 million is undisbursed.
I. Projects
HIV/AIDS Prevention and Control Program: The project was approved in June 2003 and is funded under the Multi-Country APL for the Caribbean Region, with the following objectives: (i) curbing the spread of HIV/AIDS epidemic; (ii) reducing the morbidity and mortality attributed to HIV/AIDS; (iii) improving the quality of life for persons living with HIV/AIDS; and (iv) developing a sustainable organizational and institutional framework for managing the HIV/AIDS epidemic over the longer term. The Bank’s support to Trinidad and Tobago under this project is for US$20.0 million.
III. Statement of World Bank Loans
(In millions of U.S. dollars)
| Operation | Original Principal | Available | Disbursed |
|---|---|---|---|
| HIV/AIDS prevention and control | 20.0 | 13.6 | 6.4 |
| Operation | Original Principal | Available | Disbursed |
|---|---|---|---|
| HIV/AIDS prevention and control | 20.0 | 13.6 | 6.4 |
Disbursements and Debt Service
(Fiscal year ending June 30)
as of October 15, 2008
Disbursements and Debt Service
(Fiscal year ending June 30)
| Actual | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009* | |
| Total | |||||||||
| disbursements | 12.2 | 9.6 | 12.7 | 3.8 | 2.0 | 4.7 | 5.7 | 4.1 | 0.9 |
| Repayments | 9.7 | 10.2 | 12.2 | 15.5 | 17.3 | 16.4 | 15.3 | 13.0 | 4.5 |
| Net disbursements | 2.5 | -0.6 | 0.4 | -11.7 | -15.3 | -11.7 | -9.6 | -8.9 | -3.6 |
| Interest and fees | 3.6 | 6.7 | 5.9 | 5.1 | 3.8 | 3.1 | 2.5 | 2.1 | 0.3 |
as of October 15, 2008
Disbursements and Debt Service
(Fiscal year ending June 30)
| Actual | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009* | |
| Total | |||||||||
| disbursements | 12.2 | 9.6 | 12.7 | 3.8 | 2.0 | 4.7 | 5.7 | 4.1 | 0.9 |
| Repayments | 9.7 | 10.2 | 12.2 | 15.5 | 17.3 | 16.4 | 15.3 | 13.0 | 4.5 |
| Net disbursements | 2.5 | -0.6 | 0.4 | -11.7 | -15.3 | -11.7 | -9.6 | -8.9 | -3.6 |
| Interest and fees | 3.6 | 6.7 | 5.9 | 5.1 | 3.8 | 3.1 | 2.5 | 2.1 | 0.3 |
as of October 15, 2008
Loans Summary in U.S. dollars
Loans Summary in U.S. dollars
| Total disbursed (IBRD): | 384,600,000 |
| Of which has been repaid: | 229,031,529 |
| Total now held by IBRD: | 29,219,377 |
| Total undisbursed: | 6,443,223 |
Loans Summary in U.S. dollars
| Total disbursed (IBRD): | 384,600,000 |
| Of which has been repaid: | 229,031,529 |
| Total now held by IBRD: | 29,219,377 |
| Total undisbursed: | 6,443,223 |
Appendix III. Trinidad and Tobago—Relations with the Inter-American Development Bank (IDB)
(As of September 30, 2008)
Financing
Currently, the IDB is the main source of overseas development assistance for Trinidad and Tobago. Since 2002, annual disbursements and approvals have averaged US$37 million and US$32 million per year, resepectively. However, cash flow has been quite strongly negative as the portfolio has gradually diminished in size.
Projected.
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 20081 | |
|---|---|---|---|---|---|---|---|---|---|
| Loan disbursements | 24.7 | 28.7 | 24.5 | 30.7 | 40.7 | 52.7 | 23.8 | 47.2 | 37.6 |
| Repayments | 35.9 | 37 | 43 | 45.4 | 55.5 | 61 | 64.1 | 39.7 | 47.2 |
| Net Loan Flow | -11.2 | -8.3 | -18.5 | -14.7 | -14.8 | -8.3 | -40.3 | 7.5 | -9.6 |
| Subscriptions and Contributions | 2.2 | 0.5 | 0.4 | 0.3 | 0.2 | 2.4 | 0 | 0 | 0.0 |
| Interest and Charges | 30.2 | 28.5 | 23.9 | 22.4 | 20 | 19 | 18.3 | 18.4 | 21.7 |
| Net Cash Flow | -43.6 | -37.3 | -42.8 | -37.4 | -35 | -29.7 | -58.6 | -10.9 | -31.3 |
Projected.
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 20081 | |
|---|---|---|---|---|---|---|---|---|---|
| Loan disbursements | 24.7 | 28.7 | 24.5 | 30.7 | 40.7 | 52.7 | 23.8 | 47.2 | 37.6 |
| Repayments | 35.9 | 37 | 43 | 45.4 | 55.5 | 61 | 64.1 | 39.7 | 47.2 |
| Net Loan Flow | -11.2 | -8.3 | -18.5 | -14.7 | -14.8 | -8.3 | -40.3 | 7.5 | -9.6 |
| Subscriptions and Contributions | 2.2 | 0.5 | 0.4 | 0.3 | 0.2 | 2.4 | 0 | 0 | 0.0 |
| Interest and Charges | 30.2 | 28.5 | 23.9 | 22.4 | 20 | 19 | 18.3 | 18.4 | 21.7 |
| Net Cash Flow | -43.6 | -37.3 | -42.8 | -37.4 | -35 | -29.7 | -58.6 | -10.9 | -31.3 |
Projected.
Portfolio composition
The current loan portfolio consists of 8 operations with a total approved value of US$454 million, and an undisbursed value of US$305 million. The Bank expects to approve one additional operation—a US$49.5 million project in support of Seamless Education—before the end of 2008. The Bank also has a small portfolio of technical assistance grants, totalling US$4.6 million, of which US$2.5 million remain undisbursed.
| Name | Signature Date | Approved (in US$ million) | Disbursed (in US$ million) |
|---|---|---|---|
| National Highway Program | May 20, 1997 | 120.0 | 115.9 |
| Health Sector Reform Program | May 20, 1997 | 134.0 | 113.5 |
| Secondary Education Program | July 06, 1999 | 105.0 | 52.8 |
| National Settlements Program Phase II | June 21, 2002 | 32.0 | 16.7 |
| Trade Sector Support Program | May 21, 2003 | 5.0 | 1.8 |
| Public Sector Reform Initiation Program | March 17, 2004 | 5.0 | 2.4 |
| Electronic Government & Knowledge Brokering | March 16, 2007 | 28.0 | 0.0 |
| Citizen Security Program | April 5, 2008 | 24.5 | 1.9 |
| Name | Signature Date | Approved (in US$ million) | Disbursed (in US$ million) |
|---|---|---|---|
| National Highway Program | May 20, 1997 | 120.0 | 115.9 |
| Health Sector Reform Program | May 20, 1997 | 134.0 | 113.5 |
| Secondary Education Program | July 06, 1999 | 105.0 | 52.8 |
| National Settlements Program Phase II | June 21, 2002 | 32.0 | 16.7 |
| Trade Sector Support Program | May 21, 2003 | 5.0 | 1.8 |
| Public Sector Reform Initiation Program | March 17, 2004 | 5.0 | 2.4 |
| Electronic Government & Knowledge Brokering | March 16, 2007 | 28.0 | 0.0 |
| Citizen Security Program | April 5, 2008 | 24.5 | 1.9 |
Areas of future focus
The IDB is currently preparing a new Country Strategy for Trinidad and Tobago for the period of 2008–2012. Based on an analysis of the current economic conditions, the strategy for sovereign financing is expected to focus mainly on quality of public expenditure and (non-energy sector) private sector development. The Bank will also continue to provide support in the health and housing sectors, and bring to fruition long-standing preparations for an environmental program in Southwest Tobago.
Quality of public expenditure: The Bank proposes to support: (i) the modernisation of procurement and financial management systems; (ii) the gradual introduction of a Medium-Term Expenditure Framework; and (iii) the strengthening of results-based management in key sector agencies.
Private sector development: The Bank is already assisting in the establishment of new framework for Public-Private Partnerships, and plans to develop a support program for Small- and Medium-Sized Enterprises.
In addition, the Bank anticipates an expansion of its non-sovereign guaranteed financing to Trinidad and Tobago’s private sector, possibly in the areas of energy, tourism, infrastructure, and financial services.
Appendix IV. Trinidad and Tobago—Statistical Issues
Data provision has some shortcomings, but is broadly adequate for surveillance. On September 30, 2004, Trinidad and Tobago started participating in the IMF’s General Data Dissemination System. However, metadata and plans for improving the statistical system need to be updated in line with commitments under the GDDS. Institutional arrangements need to be strengthened to facilitate improved compilation and reporting as well as collaboration among the central bank, the central statistical office, and the ministry of finance, planning, and development, and to avoid duplication of data production efforts and some inconsistencies across sectoral databases.
Real sector statistics
The Central Statistical Office (CSO) revised the GDP base year from 1985 to 2000, improved the methodology for calculating value added at each sector level, and switched from valuation at factor cost to market prices. The upgrading of the national accounts has involved, in particular, the inclusion of the large gas sector production (which came on stream in 2000) in the GDP calculations; and a review of the value added estimation techniques for the telecommunications sector (using the number of call units instead of the number of callers) and the financial sector (by constructing individual extrapolators for each sub-industry and then aggregating them). The CSO does not produce quarterly GDP estimates, although the central bank compiles quarterly volume indicators. A STA technical assistance mission on national accounts in September 2005 encouraged the CSO to start the compilation process of quarterly macro indicators. The mission also found that while there was no serious staff shortages that could affect the production of statistics, a staff reallocation would improve efficiency.
The public has direct access to the retail price index which is published in the CSO’s website. The retail price index was rebased from 1985 to January 2003 to incorporate information from the 1997/98 Household Budgetary Survey, and to correct the index’s aggregation formula.
Government finance statistics
Data on central government operations and debt are compiled separately by the Ministry of Finance, Planning, and Development (MFPD) and the central bank, and show significant differences. The MFPD compiles fiscal data using a national classification system for government transactions and debt of the central government. These data are sufficiently detailed for use in compiling cash data according to GFSM 1986 methodology. Reporting of these cash-based data in the GFSM 2001 framework is also being undertaken by the MFPD.
Data for the period 2003–05 were published in the 2007 Government Finance Statistics Yearbook (GFSY) and a submission of 2006 data has been received by STA for publication in the 2008 GFSY.
Data on selected public enterprises and statutory bodies are compiled by the investment division, the domestic debt division, and the budget division of the MFPD. The data compiled by these divisions are subject to differences, particularly with respect to transfers. Expense data are sometimes misclassified, as the distinction between consumption of fixed capital and use of goods and services is not made.
Monetary and financial statistics
The monthly monetary account for other depository corporations (ODCs) currently covers only financial institutions that are licensed by the central bank under the 1993 Financial Institutions Act. No licensed ODCs only report voluntarily on a quarterly basis. No data are reported by credit unions and the Post Office Savings Bank. The lack of these data has prevented the compilation of a more comprehensive Depository Corporation Survey. The authorities should also consider developing systems for reporting balance sheet accounts for the mutual funds, with a view to compiling a more comprehensive financial survey in the future. Trinidad and Tobago has not yet migrated to the standardized report forms (SRFs) for the submission of monetary statistics. In January 2008, a mission assisted the authorities in producing the SRF for the central bank.
External sector statistics
Quarterly aggregate balance of payments estimates and annual balance of payments data are disseminated by the central bank in its national publications. Annual balance of payments data are also sent to STA, although with considerable delay. The presentation of the balance of payments data is in broad conformity with guidelines outlined in the fifth edition of the Balance of Payments Manual. The Private Sector Capital Flows and Investor Perception survey needs to be improved on the quantity and quality of responses, and by estimating the market value of shares. There are sizable differences between some items of the external public debt compiled by the Central Bank and the MFPD. The Central Bank should expand its current debt reporting system to include comprehensive coverage of external loans and debt of the entire public sector, as well as publicly guaranteed debt.
Trinidad and Tobago: Table of Common Indicators Required for Surveillance
As of December 8, 2008
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).
Trinidad and Tobago: Table of Common Indicators Required for Surveillance
As of December 8, 2008
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | December 2008 | December 2008 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | August 2008 | October 2008 | M | M | M |
| Reserve/Base Money | August 2008 | October 2008 | M | M | M |
| Broad Money | August 2008 | October 2008 | M | M | M |
| Central Bank Balance Sheet | August 2008 | October 2008 | M | M | M |
| Consolidated Balance Sheet of the Banking System | August 2008 | October 2008 | M | M | M |
| Interest Rates2 | September 2008 | November 2008 | M | M | M |
| Consumer Price Index | October 2008 | November 2008 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | September 2008 | November 2008 | A | A | NA |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | September 2008 | November 2008 | M | M | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | September 2008 | November 2008 | A | A | A |
| External Current Account Balance | 2007 | November 2008 | A | A | A |
| Exports and Imports of Goods and Services | 2007 | November 2008 | A | A | A |
| GDP/GNP | 2007 | August 2008 | A | A | A |
| Gross External Debt | December 2007 | November 2008 | A | A | A |
| International Investment Position6 | 2007 | November 2008 | A | A | A |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).
Trinidad and Tobago: Table of Common Indicators Required for Surveillance
As of December 8, 2008
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of publication7 | |
|---|---|---|---|---|---|
| Exchange Rates | December 2008 | December 2008 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | August 2008 | October 2008 | M | M | M |
| Reserve/Base Money | August 2008 | October 2008 | M | M | M |
| Broad Money | August 2008 | October 2008 | M | M | M |
| Central Bank Balance Sheet | August 2008 | October 2008 | M | M | M |
| Consolidated Balance Sheet of the Banking System | August 2008 | October 2008 | M | M | M |
| Interest Rates2 | September 2008 | November 2008 | M | M | M |
| Consumer Price Index | October 2008 | November 2008 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | September 2008 | November 2008 | A | A | NA |
| Revenue, Expenditure, Balance and Composition of Financing3 – Central Government | September 2008 | November 2008 | M | M | A |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | September 2008 | November 2008 | A | A | A |
| External Current Account Balance | 2007 | November 2008 | A | A | A |
| Exports and Imports of Goods and Services | 2007 | November 2008 | A | A | A |
| GDP/GNP | 2007 | August 2008 | A | A | A |
| Gross External Debt | December 2007 | November 2008 | A | A | A |
| International Investment Position6 | 2007 | November 2008 | A | A | A |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).