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The Economy of the Republic of Trinidad and Tobago
Trinidad and Tobago continues to experience real GDP growth as a
result of economic reforms, tight monetary policy and fiscal
responsibility. Long-term growth looks promising, as Trinidad and
Tobago further develops its natural resources and the industries
which follow down stream from natural gas, including petrochemicals,
fertilizers, iron/steel and aluminum.
Strong economic growth in Trinidad and Tobago over the past few
years has led to trade surpluses, even with high import levels due
to industrial expansion and increased consumer demand. In 2006,
unemployment fell to 5% down from 6.7% in 2005 and stood at 6.5%
during the first quarter of 2007. Currently, as the non energy
sector continues to do relatively well, unemployment in Trinidad &
Tobago remains low – 4.6 percent. There are no currency or capital
controls and the Central Bank maintains the TT dollar in a lightly
managed, stable float against the U.S. dollar. The exchange rate as
of January 2009 is $TT 6.2993 to US$1
Trinidad and Tobago has made a transition from an oil-based economy
to one based on natural gas. The petrochemical sector, including
plants producing methanol, ammonia, urea, and natural gas liquids,
continued to grow in line with natural gas production, which up
until the last quarter of 2008 continued to expand to meet the needs
of new industrial plants coming on stream over the next few years,
including iron, aluminum, ethylene and propylene. Trinidad and
Tobago is the fifth-largest exporter of LNG in the world and the
single largest supplier of LNG to the U.S., supplying two-thirds of
all LNG imported into the U.S.
With the sharp decline in international oil and gas prices and the
resulting falling demand for energy - based products, the Central
Bank estimated real GDP growth to have slowed to approximately 3.5
percent at the close of 2008. Headline inflation accelerated to 14.8
percent as at September 2008 and food inflation reached 35 percent
stemming primarily from the record rise in international food
prices. The Central Bank’s projection is for real GDP growth to
decline to approximately 2 percent in 2009. It is not anticipated
that the slow down in the energy sector will significantly affect
the unemployment rate.
Trinidad and Tobago has an open investment climate. Since 1992,
almost all investment barriers have been eliminated. The government
continues to welcome foreign investors and has concluded double
taxation, investment protection and intellectual property rights
agreements, and bilateral investment treaties with several countries
including the United States. |
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