As reported by the Central Bank of the twin island state of Trinidad & Tobago, real GDP and economic activity is estimated to have expanded at an average rate of 1.7 per cent (year-on-year) for four successive quarters to June 2013, compared with a contraction that averaged 1.6 per cent in the preceding four quarters.
“The turnaround was driven by the non-energy sector where output rose at an average pace of nearly 2 ½ per cent in the four quarters to end-June 2013. The energy sector expanded at a much slower average rate of 0.7 per cent (year-on-year) in the period, as intensified maintenance work and security upgrades posed a severe drag on the sector’s performance.
The central bank went on to state that, “There are encouraging signs that the domestic economy appears to be on a path of recovery, as evidenced by four consecutive quarters of slow but steady year-on-year growth from July 2012 to June 2013. Growth has been mainly driven by the non-energy sector and this trend is expected to continue into the second half of 2013 as the planned maintenance of gas and downstream plants, which began in September 2013, is likely to impact the performance of the energy sector.”
The central bankers expressed concern, about the eight successive months of decline in business lending to July 2013 and elevated liquidity levels, both of which reflect continued caution on the part of the private sector. Against this backdrop, the Central Bank views the present accommodative monetary policy stance as appropriate to support the ongoing recovery and has decided to maintain the ‘Repo’ rate at 2.75 per cent.
The Central Bank said it will continue to nurture financial conditions supportive of the recovery, while keeping economic and monetary conditions under close review in the coming months.
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