In Prime Min­is­ter Dr Kei­th Row­ley’s New Year mes­sage to the na­tion, he hailed the progress seen in what was the “first full year of nor­mal­cy af­ter the Covid-19 pan­dem­ic.”

How­ev­er, de­spite his as­sess­ment that the coun­try has large­ly got back on­to its feet from a so­cio-eco­nom­ic stand­point in 2023, ex­ter­nal fac­tors could eas­i­ly im­pact the coun­try.

He said: “We can an­tic­i­pate that the new year will be one full of risks, even as it holds con­sid­er­able promise. Glob­al­ly, fore­cast­ers pre­dict that 2024 will be a year of ‘volatil­i­ty’, ‘un­cer­tain­ty’, ‘com­plex­i­ty’ and ‘am­bi­gu­i­ty.”

The Prime Min­is­ter point­ed to sta­tis­tics from the Cen­tral Sta­tis­ti­cal Of­fice to un­der­line that the econ­o­my was on the up, not­ing “a re­turn to growth of three per cent in the first quar­ter of 2023, fol­lowed by signs of fur­ther growth in the sec­ond quar­ter. “

The Prime Min­is­ter point­ed out sev­er­al in­di­ca­tors that sug­gest­ed im­prove­ment, not­ing: “Af­ter a pe­ri­od of height­ened in­fla­tion, the CSO in­di­cat­ed that in Oc­to­ber the rate stood at 1.3 per cent.

“To our cred­it, food price in­fla­tion fell from rough­ly 10 per cent in May to 1.9 per cent in Oc­to­ber. We can an­tic­i­pate that the in­creas­es in the min­i­mum wage, and oth­er gov­ern­ment poli­cies will fur­ther ease the cost-of-liv­ing bur­den on the most vul­ner­a­ble.”

He al­so hailed the de­cline to 3.7 per cent of the un­em­ploy­ment rate, while again al­lud­ing to the suc­cess­ful ne­go­ti­a­tions of the Drag­on Gas deal.

The Prime Min­is­ter’s sen­ti­ments were large­ly sim­i­lar to the out­look in the Cen­tral Bank’s Mon­e­tary Pol­i­cy An­nounce­ment for De­cem­ber 2023.

In­deed, the an­nounce­ment opened with spe­cial em­pha­sis on ex­ter­nal fac­tors which could im­pact the coun­try.

“Notwith­stand­ing re­cent pos­i­tive de­vel­op­ments, ma­jor down­side risks pre­vail. In par­tic­u­lar, the un­set­tled geopo­lit­i­cal land­scape, ac­cen­tu­at­ed by the con­flict in the Mid­dle East and a slew of na­tion­al elec­tions sched­uled for 2024, has height­ened eco­nom­ic un­cer­tain­ty,” ac­cord­ing to the Mon­e­tary Pol­i­cy Com­mit­tee (MPC) of the Cen­tral Bank.

The re­port sim­i­lar­ly lists a slew of pos­i­tive eco­nom­ic signs in 2023, in­clud­ing in­creased out­put and ac­tiv­i­ty in the non-en­er­gy sec­tor which gave the coun­try an ad­di­tion­al boost as well as buoy­ant ac­tiv­i­ty in the com­mer­cial bank­ing sec­tor as con­sumer and busi­ness loans in­creased over the year.

How­ev­er, the po­ten­tial of the econ­o­my be­ing tilt­ed by an­oth­er geopo­lit­i­cal event was not­ed.

“In re­view­ing ex­ter­nal de­vel­op­ments, the Mon­e­tary Pol­i­cy Com­mit­tee (MPC) took par­tic­u­lar note of the rapid slow­down in glob­al in­fla­tion and the less ag­gres­sive mon­e­tary stance adopt­ed by ma­jor Cen­tral Banks.

“How­ev­er, on­go­ing and emerg­ing geopo­lit­i­cal fac­tors are cloud­ing the ex­ter­nal eco­nom­ic pol­i­cy out­look for 2024. Do­mes­ti­cal­ly, macro­eco­nom­ic con­di­tions ap­pear favourable based on the re­treat of in­fla­tion, sus­tained pri­vate sec­tor cred­it growth and ro­bust non-en­er­gy sec­tor ac­tiv­i­ty. Short-term TT/US in­ter­est rate dif­fer­en­tials re­main a con­cern as re­gards ex­ter­nal bal­ance, but could nar­row fur­ther based on the pro­ject­ed down­ward path of for­eign rates,” said MPC as it once again con­firmed it was main­tain­ing the re­po rate at 3.50 per cent.

The re­port how­ev­er closed: “At the same time, the MPC con­sid­ered that the dy­nam­ic na­ture of ex­ter­nal eco­nom­ic de­vel­op­ments in 2023, their reper­cus­sions on Trinidad and To­ba­go’s open econ­o­my, and the ex­pect­ed con­tin­u­a­tion of that sit­u­a­tion in 2024 war­rant­ed con­tin­ued vig­i­lance and agili­ty on the part of the Cen­tral Bank to po­ten­tial­ly rapid­ly chang­ing cir­cum­stances.”

Econ­o­mist Dr Mar­lene Attzs ac­knowl­edged that the pub­lic had to be mind­ful that sev­er­al in­ter­na­tion­al in­ci­dents could have an im­pact on the Trinidad and To­ba­go econ­o­my. 

“It is im­por­tant that the peo­ple of Trinidad and To­ba­go un­der­stand that while we might be ge­o­graph­i­cal­ly re­moved, a lot of what hap­pens in the rest of the world im­pacts us.

“So whether it’s Rus­sia or Ukraine, which we have felt the im­pacts of that as it has im­pact­ed on en­er­gy prices, or Is­rael, Hamas,” Dr Attzs told the Busi­ness Guardian in a phone in­ter­view.

“Things could hap­pen that could im­pact on Trinidad and To­ba­go. And then of course, geopo­lit­i­cal­ly speak­ing, we have our neigh­bours, Venezuela and Guyana, who are hav­ing a bit of a tiff and you know, we have to man­age how that can im­pact us, notwith­stand­ing the fact that we’ve ad­vanced in terms of our ac­cess of the Drag­on gas deal. So there are a num­ber of head­winds, as we call them in eco­nom­ics, that could im­pact our eco­nom­ic tra­jec­to­ry,’ she ex­plained.

“What in­flu­ences eco­nom­ic growth in our econ­o­my is re­al­ly how the en­er­gy sec­tor is pro­gress­ing. And that progress in the en­er­gy sec­tor, of course, is de­ter­mined by what hap­pens ex­ter­nal­ly. So it’s re­al­ly a kind of chick­en and egg co­nun­drum in which we find our­selves.”

She warned that there were al­so in­ter­nal vari­ables such as the ad­just­ment of the elec­tric­i­ty rate and the im­ple­men­ta­tion of the prop­er­ty tax which could al­so im­pact the eco­nom­ic cli­mate in 2024.

“I think 2024 is go­ing to be sig­nif­i­cant for us. And then you have from the macro­eco­nom­ic side in terms of the pop­u­la­tion, the fact that we’re fac­ing high­er elec­tric­i­ty rates, the prop­er­ty tax, some con­ver­sa­tions, ru­mours so far around in­creas­ing elec­tric­i­ty rates and all of the at­ten­dant is­sues around that un­em­ploy­ment rate,” said Dr Attzs.

“If you take a dri­ve around many of our com­mer­cial ar­eas, you will see lots of busi­ness­es up for rent or sale,” she said, “which should trans­late in­to per­sons who will be­come un­em­ployed. And then you have to kind of mar­ry that with the mi­gra­tion is­sue. So it could mean that mi­grants are re­plac­ing lo­cal labour, which is why our un­em­ploy­ment fig­ures are look­ing low­er. So there are a num­ber of things for us to look for­ward to but hope­ful­ly, the winds of change will be pos­i­tive and you’ll be able to look for­ward to bright 2024.”

An­oth­er econ­o­mist Dr Vaalmik­ki Ar­joon was al­so keep­ing an eye on the im­pact of these new rates.

“What will how­ev­er, ex­ac­er­bate in­fla­tion and the cost of liv­ing more pro­found­ly are the im­ple­men­ta­tion of the prop­er­ty tax and pos­si­ble in­creas­es in elec­tric­i­ty rates go­ing for­ward.

“In­deed, while it ap­pears that tax­es on com­mer­cial prop­er­ties are not be­ing rolled out ini­tial­ly, some busi­ness own­ers, more so small ones and those that op­er­ate from their own per­son­al res­i­den­tial out­lets, may be in­clined to in­crease their prices to off­set the high­er ex­pense as­so­ci­at­ed with the prop­er­ty tax they are pay­ing.

“Nat­u­ral­ly, prices will go up even fur­ther when tax­es on com­mer­cial prop­er­ties are im­ple­ment­ed. And in the event of hikes in elec­tric­i­ty rates, these will com­pound an al­ready high cost of liv­ing for house­holds,” said Ar­joon, who al­so not­ed while there had been signs of in­fla­tion slow­ing, ac­cord­ing to sta­tis­ti­cal da­ta, the com­mon man may not see that re­flect­ed when pur­chas­ing goods.

“While food in­fla­tion has slowed, this does not mean that prices are falling—it means that the rate at which prices are in­creas­ing has slowed, but prices are still very much high,” he said.

Dr Ar­joon not­ed that while Trinidad and To­ba­go is pro­ject­ed by the IMF to see growth in 2024, the coun­try’s per­for­mance still is ex­pect­ed to be short of pre-pan­dem­ic re­turns.

He how­ev­er said some ar­eas should be at the top of our fo­cus.

He said: “Our per­for­mance lo­cal­ly can be strength­ened by se­ri­ous ef­forts to:

(1) Re­move the hin­drances to do­ing busi­ness for the pri­vate sec­tor;

(2) Mit­i­gate crim­i­nal ac­tiv­i­ties;

(3) Im­prove our forex earn­ings and ac­ces­si­bil­i­ty; and

(4) At­tract mean­ing­ful lev­els of for­eign di­rect in­vest­ment.

“All of these will im­prove the con­fi­dence in the econ­o­my, has­ten the di­ver­si­fi­ca­tion thrust, in­crease pro­duc­tive em­ploy­ment op­por­tu­ni­ties, pro­duc­tion, ex­ports and state rev­enues , while al­so low­er­ing pover­ty. These ought to be the key pri­or­i­ties for the state go­ing for­ward, which is no dif­fer­ent from what they should have ad­dressed in pri­or years,” Ar­joon said.