PORT OF SPAIN, Trinidad, CMC – The Central Bank of Trinidad and Tobago (CBTT) Friday said there has been “a slow and steady recovery” of the domestic economy in the first quarter of 2023.
In its latest Monetary Policy Announcement for June, the CBTT said that on the energy side, there were increases in liquid natural gas and methanol production compared to the first quarter of 2022, alongside the reduced output of crude oil, natural gas, natural gas liquids, ammonia, and urea.
As regards non-energy sectors, strengthening business activity and consumer demand was reflected in expansions in the transportation and storage, wholesale and retail trade, electricity, water, and construction sectors.
The CBTT said activity in the finance, insurance, manufacturing, and agriculture sectors demonstrated less buoyancy.
It said domestic inflation trended downward over the first five months of this year.
According to the Central Statistical Office’s (CSO) Index of Retail Prices, headline inflation slowed to 5.7 percent in May 2023, compared with six percent one month prior and 8.7 percent in December 2022.
The CBTT said declining international food prices in tandem with easing local produce prices resulted in a decline in food inflation to 9.7 percent in May 2023, from 11.2 percent in April 2023 and 17.3 percent in December 2022.
It said core inflation, which excludes food prices, remained unchanged at 4.8 percent in May 2023 from the previous month but lower than the 6.7 percent recorded in December 2022. “The outlook is for continued moderation in headline inflation, although adverse weather could lead to some spikes in local food crop prices,” the CBTT said.
It said private sector credit was relatively steady over the first four months of 2023, with growth of 6.5 percent on a year-on-year basis in April 2023, bolstered by consumer loan demand and real estate mortgage lending.
The Central Bank said that credit to businesses sustained a 6.4 percent expansion in the 12 months to April 2023, albeit slower than the 9.8 percent growth recorded in December 2022.
“Liquidity remained ample, bolstering the supply of credit to the economy. Commercial banks’ excess reserves at the Central Bank increased from a daily average of TT$6.6 billion (One TT dollar=US$ 0.16 cents) in March 2023 to TT$7.8 billion by the middle of June 2023.
“Between February and May 2023, the short-term three-month differential between Trinidad and Tobago and United States three-month treasuries moved to -476 basis points from -429 basis points in the context of continued interest rate increases by the US Fed,” the CBTT added.
The bank said that its Monetary Policy Committee (MPC) carefully examined international economic developments, particularly the slowdown in global growth, geopolitical tensions, the decline in inflationary pressures, and the monetary stances of primary and other central banks. “The Committee took note of the widening of the negative TT/US interest differential, alongside evidence on the domestic side of a progressive decline in inflation and a gradual economic recovery, facilitated by credit that was expanding just above the pace of headline inflation.
“Considering all factors, the MPC agreed to hold the repo rate at 3.50 percent,” it added.
and then  Friday said there has been “a slow and steady recovery” of the domestic){kind=link}