The Central Bank of Trinidad and Tobago (CBTT) says while there’s evidence pointing towards this country’s economic growth, it’s not too extravagant.
In its Annual Economic Survey 2024, released on Friday, the CBTT said that overall, global economic activity was mixed in 2024. It said that factors such as persistent inflationary pressures, geopolitical conflicts and adverse weather events were major concerns for some of the world’s larger economies.
Domestically, the CBTT said that positive economic growth was sustained during the first nine months of 2024, but the expansion was relatively modest:
“Data from the Central Statistical Office (CSO) showed that real GDP improved by 0.3 per cent (year-on-year) in the first three quarters of 2024. Activity in the energy sector fell by 1.5 per cent (year-on-year) over the nine months, given the reduced output of several commodities.”
The CBTT explained that these included crude oil, natural gas, liquefied natural gas (LNG) and petrochemicals.
Meanwhile, the report noted that the non-energy sector grew by 1.0 per cent supported by positive performance of several sub-sectors, including Transport and Storage, Manufacturing (excluding Refining and Petrochemical output), Financial and Insurance Activities, and Wholesale and Retail Trade (excluding Energy).
Indicators monitored by the Central Bank further suggested expansions in both energy and non-energy sector activity over the fourth quarter of 2024.
The report explained further that inflationary pressures continued to wane in 2024.
It said that during 2024, headline inflation slowed to 0.5 per cent from 4.6 per cent in 2023, owing to declines in both food and core inflation.
Food inflation decreased to 1.5 per cent in 2024 compared to 7.7 per cent in 2023, underpinned by lower international food prices and increased local supply of produce.
Core inflation receded to 0.2 per cent in 2024 from 3.9 per cent one year earlier.
In terms of fiscal deficits, the CBTT noted that softer energy prices coupled with declining domestic energy production contributed to a much higher fiscal deficit than budgeted for the fiscal year (FY) ended September 2024.
“The provisional outturn from the Ministry of Finance indicates that the Central Government fiscal accounts recorded a deficit of $9.1 billion in FY2023/24, compared to an initially budgeted deficit of $5.2 billion and a deficit of $3.2 billion in FY2022/23.”
The report said that Central Government revenues were severely impacted by a large falloff in energy revenues which outpaced a pickup in non-energy receipts.
“The deficit was financed through domestic and external borrowings along with withdrawals from the Heritage and Stabilisation Fund (HSF). Adjusted General Government debt outstanding grew to $140.6 billion at the end of September 2024, $4.1 billion more than in September 2023,” it added.
The CBTT did indicate, however, that Trinidad and Tobago’s economy is expected to grow steadily against the backdrop of an increasingly uncertain global context:
“Lower gas supplies could, if the decline is unchecked, constrain the expansion of energy production, with spillovers on the fiscal position and reserve accumulation, while non-energy activity is anticipated to remain buoyant. Domestic demand pressures on headline inflation are expected to remain low, although widening trade tensions globally can result in higher imported inflation.”
Regarding the unemployment rate, the CBTT reported that official labour market statistics from the CSO indicate that the unemployment rate increased to 5.0 per cent in 2024, higher than the 4.0 per cent recorded in 2023.
“The labour force contracted by 7.1 thousand persons as the number of persons with jobs fell by 12.7 thousand persons, while the number of persons unemployed (persons without jobs and actively seeking employment) increased by 5.5 thousand persons. Consequently, the labour force participation rate1 declined to 55.1 per cent in 2024, from 55.6 per cent recorded in 2023,” it said.
Notwithstanding the increase in unemployment, the CBTT said that retrenchments declined in 2024.
In terms of consumer price inflation, the CBTT explained that inflationary pressures continued to retreat in 2024, underpinned by lower international food prices and increased availability of local agricultural produce.
During 2024, headline inflation slowed to an average of 0.5 per cent, down from 4.6 per cent recorded in 2023 (Table 7). The deceleration in headline inflation was broad-based, occurring across various administrative areas.
Food inflation decelerated to an average of 1.5 per cent in 2024 compared to 7.7 per cent in 2023.
Meanwhile, core inflation slowed to 0.2 per cent in 2024 from an average of 3.9 per cent one year prior.
