The economy of Trinidad and Tobago contracted by -1.2 per cent in the first quarter of 2015.
This just released figure by the Central Bank in its Economic Bulletin (EB) dated July 2015 is directly and unambiguously contradicting what Finance Minister Larry Howai has been telling the country.
Speaking at a United National Congress (UNC) cottage meeting at Green Acres, San Fernando on Wednesday night, Howai said “despite falling energy prices, Trinidad and Tobago’s economy has continued to record positive growth,” according to a release from the UNC campaign office Kamla 2015 yesterday.
However, Trinidad & Tobago economic activity slowed in the first quarter of 2015 year-on-year (y-o-y) to -1.2 per cent, the Central Bank of Trinidad & Tobago (CBTT) said in the EB. Trinidad and Tobago’s energy sector contracted -3.3 per cent y-o-y in Q1 2015 while non-energy shrunk -0.7 per cent over the same period, CBTT said.
The country’s overall deficit also doubled y-o-y from -0.9 per cent of gross domestic product (GDP) from October 2013 to May 2014 to -1.8 per cent of GDP October 2014 to May 2015, the CBTT said.
Howai: Exceptional performance
Meanwhile, Howai in the release said: “In the nine months income was down by $3 billion and we actually were able to bring in exceptional income by selling assets that we had for CLICO. They have to start paying us back and that reduced the negative income. We reduced the expenses by $6 billion so overall while we expected a deficit of $4 billion we only showed a deficit of $1 billion. The first nine months was exceptional for us in terms of performance of our economy.”
9,100 women stopped working
Unemployment increased to 3.7 per cent in Q1 2015 vs 3.1 per cent in Q1 2014, as 20,400 persons are no longer employed, the CBTT said. The increase in the unemployment rate was mainly on account of a decline in the number of individuals with jobs (20,400 persons) when compared to the corresponding period in 2014. However, the number of persons without jobs only increased by 3,300 persons reflecting a withdrawal of individuals from the labour force, the CBTT said.
As a result, the participation rate declined to 60.9 per cent from 62.6 per cent in Q1 y-o-y. An analysis of employment by industry revealed job losses were broad-based across sectors. While there were employment gains emerging in the Wholesale and Retail Trade, Restaurants and Hotels (6,600 persons) and Agriculture (3,000 persons) sectors, sizeable job losses were observed in the Community, Social and Personal Services (16,700 persons), Construction (5,900 persons) and Transport, Storage and Communication (4,200 persons) sectors, among others.
CBTT said: “An analysis of labour transfers revealed notable shifts in employment among the sectors but moreso a significant withdrawal of persons from the labour force since 2014. The majority of persons leaving the labour force were females (9,100 persons) who were previously employed under temporary arrangements.”
Foreign reserves fall
Foreign reserves also fell from 12.7 months of import cover to 12.2 months,from US$11.3 billion to US$10.59 billion as at June 2015 , said CBTT.
The Central Bank said the current account surplus of 8.3 per cent of GDP in 2014 is estimated to shrink to 5.2 per cent of GDP this year.
Public debt to rise
Taxpayers also have more US dollar denominated debt to inherit. CBTT
said: “External debt increased slightly to $12.9 billion as a result of US$30 million in disbursements from the Caribbean Development Bank for the Compressed Natural Gas (CNG) Project Initiative. External debt is expected to accelerate on account of new loans contracted during the quarter but not yet disbursed. This includes borrowings of US$215 million from the ING Bank N.V. in Amsterdam, Netherlands and US$171.9 million from the Export Import Bank of China. These monies are to be used to finance the purchase of naval assets, as well as for the construction of the Arima Hospital.”
Courtesy: Trinidad Express