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WASHINGTON, United States (CMC) – The International Monetary Fund (IMF) says the economy of Trinidad and Tobago is slowly recovering from a prolonged recession caused by shocks from the United States. energy supply and low energy prices.
"With signs of improvement fueled by growth in the energy sector as of the second half of 2017, the economy is expected to regain positive growth in 2018, while the recovery installs in the non-energy sector ". institution in a statement Friday after the conclusion of the mission of Article IV of 2018.
"Satisfactory progress has been made in the implementation of fiscal consolidation," he added. "As growth accelerates, policies should aim at completing fiscal adjustment, while isolating the economy from future commodity price fluctuations in a medium-term fiscal policy framework. and creating a favorable environment for the non-energy sector.The IMF said the economy is showing signs of improvement since the second half of 2017, with a return to positive growth expected in 2018 after two years of growth. recession.
He stated that real gross domestic product (GDP) has contracted slowdown of 2.6% in 2017, after the 6.1% decline recorded in 2016 due to sector shocks. energy
"The strong recovery in gas production in 2017 has had an impact on downstream industries. at a historically low level, "said the IMF." The weakness of the non-energy sector has dampened overall growth, reflecting weak activity in construction, financial services and trade; According to her, overall inflation fell to historic lows of 1.9% in 2017 on the weak aggregate demand and 1.1% in April. [19659008] While remaining at relatively low levels, the IMF has indicated that the unemployment rate reached 5.3% in the second quarter of 2017 against 4.4% in the second quarter of 2016, compared to 3.3% in the second quarter of 2014 , youth unemployment 12% in 2017, up from 7.9% in 2014.
According to the IMF, the budget deficit has reversed the upward trend of the last seven years in Trinidad and Tobago, registering a global deficit slightly lower for fiscal year 2017.
Despite higher energy prices, energy-related revenues remained stable in the twin island republic, thanks in part to incentives according to the IMF.
According to her, a significant reduction in expenditure of 2.2% of GDP The fall in expenditure on transfers and subsidies, goods and services and capital investment was partially offset by the decline in non-core revenues. energy due to the weakness of economic activity.
The IMF indicated that sources of borrowing and financing Central government debt reached 42% of GDP and the public debt, including contingent liabilities, reached 61% of GDP, which is why apparent for the 65% goal of the government. hundred. The IMF said the balance of payments remained weak, with outflows from the financial account offsetting the current account surplus.
But the international financial institution said the economy of Trinidad and Tobago is expected to grow at a modest pace. Short-term growth is likely to be driven by natural gas production, with ongoing challenges in the oil sector.
However, the IMF has declared a gradual recovery in the non-oil sector. In the medium term, growth in the economy is expected to stabilize growth at 1.5%.
The fiscal deficit is projected to decline to an average of 4 percent of GDP as energy revenues increase, non-energy revenues rebound, and spending decreases. According to the IMF, with one-time financing options that decline over time, the central government's public debt is expected to reach 43% of GDP by 2023.
IMF says gross international reserves fall in the medium term , but at a slower pace, with a continuation of foreign exchange trading under the current exchange rate regime, in the absence of a further rise in energy prices and prices. a more restrictive fiscal policy. 19659002] According to the IMF, the main risks include falling energy prices, delays in the delivery of energy related projects and disruption of production, pending the completion of the reform of the oil and gas tax system. fiscal adjustment and the persistence of foreign currency shortages may weaken market confidence and hurt the country's financing costs, "he added." The tightening of financial conditions could jeopardize balance sheets and undermine the import and production capacity of the non-energy sector. "The rise in US rates and the appreciation of the US dollar could deteriorate competitiveness and put pressure on the currency." "A sharp rise in energy prices or the implementation of a medium-term macroeconomic strategy and favorable structural reforms are upside risks."
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The IMF recommended that the strategy focus on the completion of adjustment, while protecting the economy from future fluctuations in commodities; and create an enabling environment for the non-energy sector to drive growth.
This growth should include better access to foreign exchange, a business-friendly environment, diversification efforts, crime reduction and growth-friendly public growth. investments. "
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