PORT OF SPAIN, Trinidad, CMC – The Central Financial institution of Trinidad and Tobago (CBTT) Friday mentioned that gross home product (GDP) grew by three p.c in the course of the first quarter of this yr.
In its Financial Coverage Assertion for December, the CBTT mentioned that indicators counsel a gentle financial restoration led by the non-energy sector in the course of the first 9 months of 2023.
It mentioned exercise within the transportation and storage, wholesale and retail commerce, excluding vitality, electrical energy and water, excluding gasoline and development sectors, continued to underpin the non-energy sector’s constructive efficiency.
The CBTT mentioned that labor market statistics present that the unemployment fee declined to three.7 p.c within the second quarter of 2023 in contrast with 4.9 p.c one quarter earlier.
It mentioned inflation continued to reasonable. In keeping with the Central Statistical Workplace (CSO), headline inflation measured 1.1 p.c (year-on-year) in November 2023 in contrast with 4.1 p.c three months earlier.
The central financial institution mentioned that the deceleration was pushed by decrease meals inflation, which slowed to 0.8 p.c from 5.6 p.c over the identical interval. Core inflation, which excludes meals objects, slowed to 1.2 p.c from 3.7 p.c as the total pass-through of upper gas costs carried out in late 2022 was full.
“Nevertheless, there was an uptick in producer costs (2.6 p.c) within the twelve months to June 2023 from 2.0 p.c in March, whereas worth will increase for constructing supplies (3.1 p.c) continued to decelerate over this quarter,” the CBTT mentioned.
It mentioned regarding monetary indicators; liquidity stays ample. Business banks’ extra reserves on the Central Financial institution stood at a each day common of TT$4.9 billion (One TT greenback=US$ 0.16 cents) in November 2023 and hovered round this stage till December 22 this yr.
“Nevertheless, a current uptick in authorities home financing operations has added to the variability of extra liquidity. On this context, interbank exercise was a major pick-up in the course of the fourth quarter of 2023. The repo window was additionally accessed on one event on the finish of November 2023 – the primary time since January 2022,” the CBTT added.
It mentioned that the momentum in non-public sector credit score was sustained.
Within the 12 months to October 2023, monetary system credit score grew by 7.7 p.c, and the CBTT mentioned that spurred partially by a resurgence in motorized vehicle loans, shopper lending progress reached 8.9 p.c in October 2023, surpassing the speed of enterprise credit score growth in August 2023.
Enterprise lending elevated by 7.6 p.c throughout the identical interval, whereas actual property mortgage credit score progress slowed considerably (5.8 p.c in October 2023 in contrast with 6.8 p.c in August 2023).
“There may be proof that short-term rate of interest differentials are narrowing. Heightened authorities exercise on the home capital market contributed to a slight upward shift in shorter-term home charges,” the CBTT mentioned, noting that the differential between rates of interest on three-month treasuries in Trinidad and Tobago and america moved to minus-440 foundation factors in November 2023 from minus 464 foundation factors in August 2023.
The central financial institution mentioned that in reviewing exterior developments, the Financial Coverage Committee (MPC) famous the speedy slowdown in international inflation and the much less aggressive financial stance adopted by main central banks.
“Nevertheless, ongoing and rising geopolitical components are clouding the exterior financial coverage outlook for 2024. Domestically, macroeconomic situations seem favorable based mostly on the retreat of inflation, sustained non-public sector credit score progress, and sturdy non-energy sector
exercise.”
The CBTT mentioned that short-term TT/US rate of interest differentials stay a priority concerning exterior steadiness however may slim additional based mostly on the projected downward path of overseas charges.
“Contemplating all these components, the MPC agreed to keep up the repo fee at 3.50 p.c. On the similar time, the MPC thought of that the dynamic nature of exterior financial developments in 2023, their repercussions on Trinidad and Tobago’s open economic system, and the anticipated continuation of that scenario in 2024 warranted continued vigilance and agility on the a part of the Central Financial institution to probably quickly altering circumstances. “
The CBTT mentioned it will proceed rigorously monitoring and analyzing worldwide and home developments and prospects.
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