Oct 2014 Financial News

Central Bank: First quarter 2014growth unexpectedly flat

Oct 09, 2014

Economic growth was "unexpectedly flat" in the first quarter (Q1) of 2014, the Central Bank of T&T said in its Economic Bulletin released on Tuesday.

The reason, not unheard before: "A sharp falloff in energy sector production largely offset the moderate growth momentum in the non-energy sector. Unplanned interruptions in drilling operations at bpTT’s Savonette platform – the company’s largest production platform – severely dampened output in the energy sector. Planned maintenance at Petrotrin’s refinery facilities also contributed to the sharp contraction in energy production."

Petrotrin production plummeted to lows not seen since the fourth quarter (Q4) of 2012. In Q1, the Petrotrin refinery throughput fell to 6,961,900 barrels, almost half of the previous quarter's (Q4 2013) 12,172,800 barrels. Compared to Q1 2013, the fall in refinery throughput was from a cliff 10 million barrels high.

"Growth in the non-energy sector continued to be primarily driven by the finance, insurance and real estate, distribution and construction sub-sectors," the Central Bank said.

Latest available official labour statistics suggest the unemployment situation improved in the fourth quarter of 2013, the Central Bank said. The unemployment rate fell to 3.8 per cent in the fourth quarter of 2013, from a rate of 4.7 per cent in the corresponding period of 2012. However, the decline in the unemployment rate was more reflective of an increase in job placements, the bank said.

The bulletin said: "Preliminary data for 2014 suggest even though labour market conditions are stabilizing, specific skill shortages are emerging, especially in the manufacturing and services sectors. The number of retrenchment notices filed with the Ministry of Labour and Small and Micro Enterprise Development increased marginally in the first half of 2014 when compared with the corresponding period of 2013."

Central Bank hiring spikes

The Central Bank also had labour news. Hiring spiked almost 20 per cent in 2013, according to an annex on operating results up to August 2014. The bank's staff complement rose from the 480 level it had been since at least 2009 to the 580 level in 2013. Managerial, administrative and supervisory staff rose from 216 in 2012 to 268 in 2013, while clerical, secretarial and manipulative staff rose from 270 in 2012 to 310 in 2013.

As for the money with which it operates, the Central Bank's net operating surplus fell from $613,673 in 2012 to $437,710 in 2013. Since it fell from from $1,157,764 in 2009 to $531,744 in 2010, the bank's net operating surplus has stayed below $1 million, hiccuping to $535,807 in 2011, and $613,673 in 2012.

The Central Bank's total assets, total deposits and total external assets, however, stayed in their ranges since 2009, according to the annex.

Turning to inflation, the Economic Bulletin said headline inflation slowed in the first six months of 2014 as food price inflation decelerated. During the first half (H1) of 2014, headline inflation slowed to 3.4 per cent versus 6.3 per cent in H1 2013.

The bulletin said that in H1 2014, core inflation, which excludes food prices, averaged 2.6 per cent versus 2.2 per cent in H1 2013. Food inflation averaged 4.4 per cent in H1 2014 versus 11.4 per cent in H1 2013. "However, in recent months, headline inflation accelerated because of an overwhelming upturn in food inflation," the bulletin said.

Inflation hits 22-month high

Headline inflation accelerated to 7.4 per cent in August 2014, a 22-month high, as food inflation climbed 14.8 per cent, offsetting a deceleration in core inflation to 1.4 per cent, the bulletin said.

The bank also gave the reason for the almost $2 billion fiscal surplus during the fiirst half of fiscal 2013/2014. "The surplus reflected an increase in revenue and a marginal decline in expenditure compared with the corresponding nine months of fiscal 2012/2013. Total government revenue increased by 3.6 per cent to $41,499.5 million, largely on account of higher crude oil prices and despite a fall in crude oil production," the bulletin said.

Source:
Aleem Khan
Trinidad Guardian, BG5
Thursday October 9, 2014