A recent central bank survey indicates that business confidence in Trinidad & Tobago is relatively strong, bolstering our view that the twin islands economic recovery will continue to gain steam in the coming months. As such, given rising core inflationary pressures, we forecast that the bank will begin a monetary tightening cycle in H---. ...The non-energy sector should continue to grow, thanks to government efforts to diversify the economy, although we doubt it will be enough to overcome a series of structural problems � most notably, capacity constraints and labour shortages � that will constrain economic growth overall. taBle: lonG-terM MacroeconoMic forecasts -- chapter -: Business environment -- sWot analysis -- BMi Business environment risk ratings -- Business environment outlook -- institutions -- taBle: BMi Business and oPeration risk ratinGs -- taBle: BMi leGal fraMework ratinG -- infrastructure -- taBle: laBour force Quality -- taBle: trade and investMent ratinGs -- operational risk -- chapter -: BMi Global assumptions -- Global outlook -- Growth increasingly polarised taBle: GloBal -- taBle: develoPed states, real GdP GrowtH, -- taBle: BMi versus BlooMBerG consensus real GdP GrowtH forecasts, -- taBle: eMerGinG Markets, real GdP GrowtH, -- - Business Monitor International Ltd www trinidad & tobago Q- ---- core Views We forecast real GDP growth in Trinidad & Tobago to accelerate to -.- in ---- and -.- in ----, up from the central bank s prelimi- nary figure of -.- growth in ----, as recent tax reforms incentiv- ise greater investment into the twin islands key energy sector. In addition, we expect low interest rates to continue to spur growth in consumer lending, while an uptick in business confidence indicates commercial lending may begin to rebound as well, strengthening output from non-energy sectors. ...T&T s current account balance will remain in surplus in the coming years, driven by improving export performance in the energy sector. Public investment abroad using sovereign wealth funds will likely keep the capital and financial account balance in deficit, though recent tax reform will also continue to encourage an uptick in private foreign direct investment.
...In addition to crime, we also believe that relatively sluggish economic growth could further weigh on the ruling coalition s re-election prospects (see Moderate Acceleration In Growth In ---- , January -). We forecast real GDP growth of -.- in ----, only slightly up from the central bank s estimate of -.- in ----. ...First, the PNM is currently in the midst of a heated leadership campaign, with former PNM legislator, Pennelope Beckles, challenging current PNM head Dr Keith Rowley in a contest to be decided on May --. While Rowley, who has led the PNM since ----, has successfully built an aura of inevitability around his victory (according to the NACTA poll, a majority of respondents believe he is likely to win the PNM primary), the election remains too close to call, with Rowley leading Beckles by only four percentage points, within the poll s margin of error. We view Beckles as a marginally stronger candidate for the general election than Rowley. ...Furthermore, we believe that Beckles would also cut into the prime minister s advantage with female voters. While the NACTA poll did not include data on Beckles approval rating, we note - Business Monitor International Ltd www political outlook crime the electorate s primary concern
...
