Above: Port of Spain, Trinidad (CJ Photo)
By the Caribbean Journal staff
Trinidad and Tobago’s economy is “embarking on a sustainable growth path,” the International Monetary Fund said following its Article IV Consultation with the country earlier this week.
The IMF said that maintenance-related slowdowns in the country’s crucial energy sector were ending, while non-energy growth was “robust.”
The organization said that the country’s GDP was projected to grow by 2.3 percent this year, up from 1.6 percent last year and 1.2 percent in 2012.
On the monetary front, the IMF said that the time was “drawing near” for policy tightening.
“The main external risk is from a sustained decline in energy prices,” the fund said in statement. “The domestic medium-term challenges are to boost long-run growth through structural reforms and reorienting fiscal policy, with measures to save more of the nation’s nonrenewable energy wealth, and limiting current expenditures while increasing growth-enhancing capital spending.”
The fund’s executive directors said they “welcomed” the country’s improved growth outlook, and noted what they saw as a “strong external position with limited fiscal vulnerabilities.”
“They agreed, however, that the reduction in economic slack and the need for a durable consolidation of the fiscal position suggest that a tightening of macroeconomic policies may be necessary in the near future,” the fund said. “Over the medium term, Trinidad and Tobago remains vulnerable to a decline in energy prices, which calls for structural reforms to diversify the economy and improve its growth potential.”