Trinidad & Tobago holds rate as economy still needs help

“CENTRAL BANK MAINTAINS REPO RATE AT 3.50 PER CENT

The global economic recovery is underway, with the International Monetary Fund forecasting a global expansion of 6.0 per cent for 2021. This is driven in large measure by expanded COVID-19 vaccination coverage in advanced and some emerging market economies. However, the prospects are quite uneven, based on the difficulty of access to vaccines faced by many low and middle-income countries, coupled with the growing threats posed by new variants of the virus. In general, the substantial fiscal support by governments across the world continues, alongside medium-term plans for gradual exits from such support. Likewise, broad monetary accommodation to underwrite economic recoveries has also been maintained, although some central banks have started to, or signaled the intention to, raise interest rates to stave off looming inflation.

Developments in the energy industry and pandemic-induced reactions by the public and private sectors shaped the domestic economic picture in the first half of 2021. Energy sector performance was mixed: while output of several products dipped, prices of some key energy exports were strong. Available data show that for the first four months of 2021 relative to the same period a year earlier, natural gas output was 20.6 per cent lower, while crude oil production rose marginally by 0.6 per cent. There was also some decline in production of liquefied natural gas, natural gas liquids, as well as ammonia and methanol. Meanwhile, international energy prices have been trending upwards. As at June 21, 2021 West Texas Intermediate crude oil and Henry Hub natural gas prices rose to average US$73.66 per barrel and US$3.15 per mmbtu, respectively.