PORT OF SPAIN, Trinidad – The Trinidad and Tobago economy is expected to register real gross domestic product (GDP) growth of 2.7 percent in 2023, following more moderate growth of 1.5 percent in 2022, the Ministry of Finance has said.
n a review of the local economy released here, the ministry said that the expected outturn for 2023 is premised on an expansion in the non-energy sector, partially counteracted by a marginal decline in the energy sector.
It said based on actual data from the Central Statistical Office (CSO) for the first quarter of 2023, real economic activity expanded by three percent, buttressed by marginal growth of 0.3 percent in the energy sector and a sharper 4.2 percent expansion in the non-energy sector.
The ministry said building upon the economic expansions recorded in the non-energy sector during calendar 2022, year-on-year improvements were registered by 12 non-energy industries, during the first three months of calendar 2023.
It said most notable was Trade and Repairs, which retained its position as the largest contributor to GDP, and grew robustly by 10.9 percent during this period.
The ministry said that for the full calendar 2023 period, the anticipated positive economic activity in the non-energy sector is expected to be driven by non-energy manufacturing; trade and repairs and transport and storage.
It said supporting the expected growth will be the continued rise in tourism activity, as evidenced by visitor arrival data for the period January to May 2023. The total number of visitors welcomed to Trinidad and Tobago expanded robustly by 521.2 percent to 252,338 persons during calendar 2022.
Air arrivals to Trinidad and Tobago further increased by 85.2 percent to 129,546 persons over the period January to May 2023. As it relates to Cruise ship activity in Trinidad and Tobago during the first five months of last year, 50 vessels docked with 69,232 passengers aboard, representing a substantial increase from the comparative period of calendar 2022. Yacht arrivals to Trinidad and Tobago likewise expanded by 75 percent to 329 vessels during the period January to May 2023
The ministry said that in 2022, nominal GDP climbed to TT$202,984.9 million, saying this was significantly higher than the government’s expectations at the time of the 2023 budget and was primarily due to the elevated crude oil and natural gas prices as a result of the Russian-Ukraine war; a surge in post-pandemic non-energy output; and spike in inflation.
But it said crude oil and natural gas prices have since declined on average as a result of weakened global economic conditions which have dampened demand, amidst higher supply for energy products, although there has been a spike in oil prices in September 2023.
For the first eight months of calendar 2023, the monthly average West Texas Intermediate (WTI) price for crude oil was 24.6 percent lower, averaging US$75.87 per barrel, while the monthly average European Brent (Brent) Spot price for crude oil was 24.5 percent lower, at US$81.83 per barrel.
The monthly average Henry Hub price for natural gas also fell by 62.7 percent to US$2.46 per MMBtu over the same period. As a result, the Ministry estimates calendar year nominal GDP to decline to TT$190,214.3 million in 2023.
The review noted that total government debt moved from TT$137,814.4 million in fiscal 2022 to TT$142,246.1 million last year.
“This figure comprises Adjusted General Government Debt of TT$137,209.6 million plus borrowings for Open Market Operations (OMOs) at TT$5,036.5 million. The overall increase in Total General Government Debt is due to an increase of TT$8,223.0 million in Adjusted General Government Debt,” the ministry said.
Regarding the foreign exchange situation in Trinidad and Tobago, the review noted that between October 2022 and August 2023, sales of foreign exchange to the public by authorised dealers totaled US$5,924.4 million, at least 4.7 percent above the sales of US$5,661.1million during the corresponding 2021/22 period.
It said purchases of foreign exchange from the public, except the Central Bank, by authorized dealers amounted to US$4,546.5 million, representing a 3.6 percent decline from the US$4,716.2 million purchased in the same period one year earlier.
The Central Bank’s intervention of US$1,158.1 million over the same eleven-month period of fiscal 2023, was marginally higher that the US$1,150 million sold to authorised dealers in the same period of the previous fiscal year.
Trinidad and Tobago’s balance of payments account recorded an overall deficit of US$47.8 million, for the first quarter of 2023, an improvement on the US$227.6 million deficit recorded in the same period one year earlier.
The ministry said this reduced deficit was realised on account of reduced outflows from the Financial Account, coupled with moderate growth in the Current Account balance.
“As at September 22, 2023, gross official reserves amounted to US$6,358.6 million, equivalent to 8.0 months of prospective import cover,” the review added.