2013-01-01 02:41:53 - Trinidad and Tobago Business Forecast Report Q4 2012 - a new country guide report on companiesandmarkets.com

We remain sceptical of the government´s ability to stimulate economic activity in the non-energy sector and therefore recently revised down our real GDP growth forecast for 2012 to 1.5% from 2.0%, and we foresee only a modest pick-up to 2.5% in 2013. The country´s fiscal picture continues to be boosted by high energy prices, but we still expect rising expenditure commitments to drag the fiscal accounts into the red in the medium term and forecast a budget shortfall of 0.4% of GDP in 2012 and 2013.

Although higher oil prices have mitigated the effect of declining production, the shale gas boom in the US and declining future demand for the country´s natural gas exports, remains a major long-term risk to Trinidad

 

 

& Tobago (T&T)´s key energy sector. Major Forecast Changes: In addition to the downward revision of our 2012 real GDP growth forecast for T&T from 2.5% to 1.5%, we also downgraded our 2013 growth figure. Given a tepid global growth outlook, a modest economic expansion in 2012 and little growth potential in the non-energy sector, we see few factors to drive robust growth next year. As such, we revised down our 2013 real GDP growth forecast from 3.5% to 2.5%.

Key Risks To Outlook

Upside Risks: Should the government prove able to develop stronger economic ties with Latin American neighbours, this could boost goods and services exports, posing upside risks to our growth and balance of payments projections. Downside Risks: Higher-than-expected global food prices could push inflation beyond our current forecasts and potentially lead to social unrest.

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