BUDGET STATEMENT 2014
12
SUSTAINING GROWTH, SECURING PROSPERITY
economies are entering a phase of stringent
austerity. The International Monetary Fund has
forecastthathighdebtandweakcompetitiveness
will continue to constrain growth in the region
during 2013.
DOMESTIC REVIEW
Mr. Speaker, Trinidad and Tobago’s economy
has performed significantly better than most of
our Caribbean neighbours and in many cases,
better than many developed economies.
I wish to reemphasize that on a year-on-year
basis our economy has recorded positive
economic growth in the last four consecutive
quarters driven in the main by the non-
energy sector.
Our economy is growing in the context of stable
inflationary conditions; inflation of 5.6 percent
is down from 2012, mainly as a result of lower
food prices, a matter which was impacted this
year by the removal of the VAT on food and by
the Government’s drive for food security.
The economy continues to generate jobs as the
unemployment rate has fallen and now hovers
near full employment levels at 5.0 percent.
The Government is successfully containing
the fiscal deficit in accordance with its policy
objectives and is on course to bring the fiscal
accounts into balance by 2016.
The current account of the balance of payments
remains
buoyant,
generating
consistent
surpluses.Thecountryisexperiencingsignificant
inward flows of private direct investment which
rose substantially in 2012, from US$1.831 billion
to US$2.527 billion.
5. ECONOMIC ENVIRONMENT
GLOBAL CONTEXT
Mr. Speaker, I turn to the global economic
environment. After a slowdown during 2012,
the global economic prospects have improved
again; however, the road to recovery varies for
different economies. In advanced economies,
activity improved gradually during the first
half of 2013. The US economy continues to
recover slowly.
In the Euro Area, output fell by 0.6 percent in the
fourth quarter of 2012, as the sovereign debt
crisis persists. The economic environment in
Europe remains challenging and in the Middle
East, political upheaval continues to hamper the
economic recovery of that region.
While emerging market economies continue to
grow, they have not been immune to the effects
of Europe’s debt crisis. Growth has fallen in
the Indian economy and that country is facing
substantial challenges. Brazil, Russia and China
are facing similar challenges to resume the level
of growth that their economies recorded during
the last five years.
The global outlook beyond 2014 envisages a
Euro area with considerable downside risks
although some recent signs are indicating
a mild recovery. While these developments
can certainly be expected to pose continuing
challenges to global growth and employment,
I expect that policy actions would be stepped
up to ensure that the world economy returns to
robust activity.
Mr. Speaker, the Caribbean region has also
had its fair share of challenges. The Region
for the most part has been buffeted by the
effects of the global financial crisis and most
