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Trinidad and Tobago: Trinidad and Tobago Economy Profile 2012

2012/04/05

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Trinidad and Tobago Economy Profile 2012

10/11/2010  Trinidad and Tobago was strike hard in 2009 by the global financial crisis, after 15 years of positive growth, because of the global financial crisis, the fall down of a large financial conglomerate and falling energy prices. The country entered this period of crisis from a situation of strength, with large surpluses and low debt, which has helped to deal with external and internal shocks. The budget balance turned negative, regardless of an actual decline in spending in 2009. Inflation has soared despite a fragile economic action, reflecting weather-related increases in food prices, and unemployment has risen brusquely, to 6.7% in the first quarter of 2010.
Growth should restart in 2011 with short-term risks on the downside that reflects the delicate confidence, the low regional and global uncertainty. Even with the expected strengthening of energy prices, the economic outlook in the medium term are weaker compared to the period of high growth preceded the economic crisis.
An expansionary budget correctly with additional spending and tax incentives will give confidence enlarged private sector activity and investment and higher internal and external support for improvement. Trinidad and Tobago could boost confidence in the acceleration of efforts to implement the program of public sector investment and action of arrears to contractors and VAT refunds. The medium-term challenge is to put debt on a downward line that energy revenue expected to be modest. A credible framework contains and reverse the increase in expenditure on goods and services and transfers during the period of prosperity, while enhancing the collection of non-energy revenue by improving tax administration.

The focus is on investment in physical and human capital to support the development of a knowledge-based economy, improving the business climate, including through a single window for investors, strengthening the public enterprise sector by inviting private sector participation, and accelerating privatization. It will be important to prioritize government investments for diversification especially given the availability of increasingly limited resources. The mission also supports efforts to improve the timeliness and accuracy of economic statistics mainly because of falling energy prices and the collapse of a large financial conglomerate. The country entered this period of crisis from a position of strength, with large surpluses and low debt, which provided important buffers to help address the external and internal shocks. The budget balance turned negative, despite an actual decline in spending in 2009. Inflation has soared despite a weak economic activity, reflecting weather-related increases in food prices, and unemployment has risen sharply, to 6.7 percent in the first quarter of 2010.
The focal point is on investment in physical and human capital to support the expansion of a knowledge-based economy, getting better the business environment, as well as through a single window for investors, strengthening the public enterprise sector by pleasing private sector participation, and accelerating privatization. It will be important to prioritize government investments for diversification especially given the availability of increasingly limited resources. The mission also supports efforts to improve the timeliness and accuracy of economic statistics.