Home' Trinidad and Tobago Guardian : February 5th 2015 Contents FEBRUARY 2015 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
Central Bank Governor
Jwala Rambarran is pre-
dicting an increase in pro-
duction volumes in the
energy sector in T&T for
2015. Rambarran added
that even though there
would be supply disrup-
tions, there would still be increased volume
in the sector.
"In terms of our estimate for 2015, surpris-
ingly, despite all the negative sentiment around
falling energy prices, when we look at what
is happening in the energy sector in terms of
production, this is outside of the price effect.
Looking at actual productive activity, we are
seeing some increases across a number of the
sub-energy sectors, especially LNG production
and natural gas production.
"You will recall that the Starfish well came
onstream in late December. That well is expect-
ed to be fully operational by March. When we
factor in the numbers related to Starfish and
we assume the supply disruptions we saw last
year---which is one of the worst years on record,
those supply disruptions could continue into
this year---we still get a very positive number
for energy sector production. Natural gas pro-
duction would go up and that means LNG
production is likely to go up. That would have
a spill over to most of the energy sector, par-
ticularly in relation to natural gas liquids and
some of the petrochemicals. We are actually
looking surprisingly at a turnaround in energy
sector production and growth for 2015."
Rambarran was speaking at the bank s Mon-
etary Policy announcement last week Friday,
which was held at the Central Bank, Inde-
pendence Square, Port-of-Spain.
Referring to energy exports, he predicted
there would be decline but it would not be a
"When we look at energy exports over the
next three years---from 2014 to 2017---given
the movement in both prices and production,
what we see is a drop of about US$1.7 billion
over the three-year period. This is really not
that substantial a hit one would expect because
you have these mitigating effects that are
"You have higher output for LNG, ammonia,
urea and methanol. You have lower output
for crude oil and some of the natural gas
liquids. While you still have some higher output
for iron and steel products, what you have are
compensated movements that are taking place
across the various energy commodities. Bear
in mind, I have mentioned we are using very
conservative price estimates. We have taken
a worse-case basis for 2014 in terms of energy
prices and modelled that through our balance
Boon in US,
boost in T&T
Referring to the manufacturing sector, Ram-
barran said the growth in the US economy
may result in growth for the economies of
Caricom and T&T s manufacturers can export
more to the Caricom.
"When we look at our balance of payments
over the next three years, we are actually seeing
the pick-up of non-energy exports primarily
due to the strengthening US economy.
"There is also a boon there, in that the US
is no longer our largest market for LNG exports.
Ten years ago, almost 90 per cent of our LNG
exports went into the US. In 2014, just about
5.0 per cent went to the US. That means we
now have a well-diversified LNG export port-
folio, which would help cushion shocks around
the world both in relation to the growth dif-
ferences that you are seeing in Europe and
Asia and in relation to prices."
According to a BBC news report in late Jan-
uary, the US posted annualised growth of 2.6
per cent for the fourth quarter of 2014. Overall,
Rambarran said the growth in the non-energy
sector could continue throughout 2015.
"The positive momentum in the non-energy
sector has delivered fairly respectable growth
for 15 consecutive quarters to December 2014.
The near-term outlook is for continued steady
performance in the non-energy sector, boosted
in part by strengthening growth in the United
States and softer oil prices, the tourism-based
economies of Caricom should see some uptick
in activity in 2015, and this would provide
further support to T&T s non-energy exports."
Rambarran assured that the bank would be
monitoring the likelihood of an increase in
"The Central Bank has put in place, a pro-
gramme of intensified open market operations
to aggressively remove excess liquidity from
the banking system in coming months in order
to support our repo rate adjustments.
"Larger and more frequent foreign exchange
interventions aimed at preventing systemic
foreign exchange shortfalls will indirectly con-
tribute to removing some of the excess liquidity.
Central Bank is further prepared to position
its monetary stance to address any challenges
that may arise from unanticipated changes in
global energy markets."
Asked whether T&T would need to approach
the International Monetary Fund for assistance,
he said there was no need for that.
"The conditions do not exist for us to
approach the IMF. A country approaches the
IMF when you have a balance of payments
problem and you have difficulties financing
your balance of payments."
"As I have indicated, our medium-term
outlook suggests we are likely to see a con-
tinued build up of reserves and, therefore, it
means we do not have a balance of payments
"As a matter of fact, we are likely to continue
to run current account surpluses, a little smaller
than previous years, but still surpluses averaging
of about five per cent of GDP. We have reserves
of more than $11 billion. If you benchmark
that to short-term external debt, we could
pay our debt multiple times.
"And we have balances in the Heritage and
Stabilisation Fund, the conditions do not exist
for us to return or even approach the IMF.
Central Bank Governor Jwala Rambarran.
PHOTO: SHIRLEY BAHADUR
The conditions do not exist for us to
approach the IMF. A country approaches
the IMF when you have a balance of
payments problem and you have difficulties
financing your balance of payments.
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