REVIEW OF THE ECONOMY 2013
17
SUSTAINING GROWTH, SECURING PROSPERITY
relatively stable, settling at 2.2 percent in June
2013.
The rate of unemployment in Trinidad and
Tobago fell to 4.9 percent in the third quarter
of fiscal 2012 from 5.4 percent in the second
quarter. Most industries, with the exception
of the Construction and Petroleum and Gas
industries, registered unemployment rates
below the national average.
In light of the subdued economic growth
environment and relatively stable core inflation,
the Central Bank of Trinidad and Tobago
maintained an accommodative monetary policy
stance in an effort to boost the pace of economic
activity. In the circumstance, the Bank reduced
the Repo rate from 3.0 percent in August 2012
to 2.75 percent in September 2012, where it has
remained up until June 2013. The basic prime
lending rate of commercial banks responded
accordingly, slipping from 7.8 percent in June
2012 to 7.5 percent in June 2013. Interest rates
on time loans also declined from 7.75 percent in
June 2012 to 7.5 percent in May 2013 along with
the weighted average deposit rate, which dipped
further to 0.02 percent in June 2013, from 0.2
percent in June 2012.
In the low interest rate environment, Narrow
Money (M-1A), defined as currency in active
circulation plus demand deposits expanded
by 15.5 percent over the period October 2012
to June 2013, in response to the low yields on
alternative investments. Broad Money (M-2),
defined as M-1A plus time and savings deposits
expanded in like manner, by 12.4 percent over
the same period.
The recovery of the Trinidad and Tobago
economy is expected to be further consolidated
with growth of 1.6 percent in 2013, following
on an overall growth of 1.2 percent in 2012.
The recovery is expected to gain momentum
across a widening range of economic sub-
sectors resulting in an overall growth rate of 2.5
percent in the non-petroleum sector for 2013.
The brighter outlook for the non-petroleum
sector is premised on a projected 2.6 percent
expansion in the services sub-sector, which,
with 84.2 percent, is the largest contributor to
non-petroleum GDP. After three (3) successive
years of decline from 2009 to 2011, the recovery
in 2012 is expected to be further consolidated in
2013. The services sub-sector is also expected
to exhibit continued strengthening.
Overall, energy sector output is expected to grow
by amodest 0.5 percent in 2013, representing an
improvement on the contractions experienced
in 2011 and 2012. The performance of GDP at
the sub-sector level is expected to be mixed,
reflecting an incipient turnaround in natural
gas refining, exploration and production, as well
as the growth momentum carried forward by
service contractors, which are tempered by a
milder contraction in petrochemicals .
Headline inflation on a year-on-year basis, for
the first six months of 2013 remained relatively
moderate, settling at 6.8 percent in June 2013.
This outturn reflected the general downward
trend in price levels, following a 30-month high
of 12.6 percent in May 2012. Similarly, Food
and Non-Alcoholic Beverages inflation eased
somewhat from 13.8 percent in January to 12.6
percent in June 2013. Core inflation remained
SUMMARY OF MACROECONOMIC
PERFORMANCE OF THE TRINIDAD
AND TOBAGO ECONOMY
SUMMARY OF MACROECONOMIC PERFORMANCE OF T&T
