Home' Trinidad and Tobago Guardian : June 20th 2013 Contents JUNE 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
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In a statement last week, Finance Min-
ister Larry Howai expressed the view
that the local economy could record
growth of 2 per cent for the first half
of 2013 if the improvement in the energy
In the petro-chemical sub-sector, there were
moderate increases of 3.1 percent in Urea pro-
duction and 1.4 percent in methanol produc-
The Minister also disclosed positive news
for the non-energy sector, saying that based
on the indicators available, the Central Bank
has provided flash estimates of growth for the
non-energy sector of between 2.6 to 2.9 per
cent in the first quarter of 2013.
According to Mr Howai:
It would be fair to say that there has been
a great deal of skepticism in business and
economic circles about what is being view as
an attempt by the Finance Minister to talk
up the economy.
There seems to be a general consensus that
Mr Howai may be the only individual who
has such a bright economic outlook for T&T
at this point in time.
This skepticism (which some may view as
cynicism) is due to the fact that people remem-
ber hearing the former Minister of Finance,
Winston Dookeran, saying that he was seeing
"green shoots" and "blue skies" in T&T in
2011, as he looked for metaphors to describe
the economy springing back to life.
Those who concluded that Mr Dookeran
may have suffered from economic colour
blindness would have found support from the
Central Bank s assessment of the T&T econ-
The Central Bank s Monetary Policy Report
for April 2013 (as at June 3) states that the
domestic economy declined by just over 2.5
per cent in 2011, and that growth in 2012 was
estimated to be a very weak 0.2 per cent. This
basically means the economy was flat last
Like Doubting Thomas, many in this coun-
try will have to place their hands in the wound
of the economy before they will believe that
it is growing.
The fact that the T&T economy has been
in decline mode since the third quarter of
2008 is also contributing to the skepticism
that has greeted the Finance Minister s positive
analysis of the data and evidence.
In the four-and-a-half years since the
economy tanked, many people have become
so accustomed to living in a country that
alternates between economic decline and
stagnation that they have adjusted their hori-
zons to this new "reality."
Given the decline in oil production that
began in 1979 and the increasingly bleak
annual natural gas audits conducted by
Gaffney, Cline, there is a perception that the
country s days of economic growth are behind
it.I do not share that pessimism.
At mid-2013, there are three factors that
are holding back the economy: the mainte-
nance work that bpTT and British Gas are
expected to conclude in the fourth quarter
of this year; the uncertainty over the con-
clusion of the CL Financial negotiations and
the fact that the Government was only able
to spend 60 per cent of the capital budget
for the first six months of the year.
According to the Monetary Policy Review,
for the period October 2012 to March 2013,
the budget for capital expenditure was $4.082
billion, while the actual expenditure for that
period was $2.485 billion---a shortfall of $1.6
The MPR states: "Capital spending -- the
main thrust of the government s investment
programme to spur economic growth -- was
almost 7 per cent lower than the correspon-
ding period in FY 2012. The shortfall in capital
spending was mainly due to administrative
delays, outstanding submission of invoices
for payment and delays in the implementation
of several projects."
This scenario of administrative delays, of
course, has the potential to cause a situation
in which all the projects that have been held
back for whatever reason get approved and
start at the same time. This may cause a
return to the period five years ago when
private contractors had to beg for cement
and hired guards to prevent poaching of work-
ers from their job sites.
My real concern is not that the economy
will continue to stagnate in 2014, but that
things may become so heated that the Central
Bank is forced to increase the cost of money
sharply to cool things down.
Will T&T economy grow in 2013?
Larry Howai, Finance Minister
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