Economy of Trinidad and Tobago
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Trinidad and Tobago experienced a real growth rate of 3.2% in 2002. This made 9 straight years of real growth after 8 years of economic decline. The government of Prime Minister Patrick Manning has continued the sound macroeconomic policies of the previous regime, and is trying to further improve the investment climate. Long-term growth looks promising, as Trinidad and Tobago further develops its hydrocarbon, petrochemical, and metals sectors--with significant increases in exports--and continues its diversification efforts in services, tourism, manufacturing, and agriculture.
Trinidad and Tobago's strong growth rate over the past few years has led to trade surpluses over the past 4 years, even with high import levels due to industrial expansion and increased consumer demand. The debt service ratio has fallen from 15.4% in 1997 to 4.4% in 2002. Unemployment continues to drop slowly, from 12.1% in 2001 to 10.4% in 2002.
The petrochemical sector, including methanol, ammonia, urea, and liquefied natural gas, has continued to grow and has experienced a new burst of activity with the resumption of fullscale production of all existing facilities. Natural gas production continues to expand and should meet the needs of the many industrial plants coming on stream in the next 3 years. The major development in 2003 was the completion of Train III at the Atlantic LNG plant. A fourth train is currently under construction. Trinidad and Tobago is the 5th largest exporter of liquefied natural gas in the world. The expansion of Atlantic LNG over the next 4 years could create the largest-single sustained phase of economic growth in Trinidad and Tobago. It has become the leading exporter of LNG to the United States, and now supplies some 65% of U.S. LNG imports. Trinidad and Tobago is experiencing a transition from an oil-based economy to a natural gas based economy. In 2002, production of natural gas averaged 1,826 million ft³ (52 million m³) per day representing an increase of 14.4% over output in 2001. Atlantic LNG consumes 47% of total natural gas production. As a whole the energy sector set a record growth rate of 9.5% in 2003. In 2002 the petrochemical sector accounted for 20.2% of central government revenue. The first major petroleum find in thirty years, by BHP Billiton in 2002 has revived production which had been falling since the 1970s.
In 2002, methanol production reached 2,828.9 thousand tons, an increase of 1.4% from the previous year. Exports at 2,782.4 thousand tons were marginally lower than in the previous year. Work continued on the two largescale methanol plants at the Point Lisas Industrial Estate during 2002. The first of these, the Atlas methanol facility, is slated to come on stream by the first quarter of 2004. The process design on the second plant, the M5000, was completed during the year. The M5000, 1.8 million tons per annum plant will be considered the world's largest of its kind and should be commissioned by early 2005.
Of the nonhydrocarbon sectors, distribution, construction, transport, communications, and manufacturing all show signs of continued growth. Agriculture, however, has been experiencing stagnant growth rates.
U.S. investment in Trinidad and Tobago exceeds one and one-quarter billion dollars. The U.S. investment average over the last 4 years was U.S.$300 million per year.
The government's economic strategy is based on fiscal and monetary discipline, private sector investment, and export-led growth.
The exchange rate in late 2004 was about $6.29=U.S.$1.00. The stability of the currency against the U.S. dollar has been maintained by the government's tight monetary policy.
Reductions in subsidies to state enterprises have contributed to fiscal soundness and lent credibility to the government's ongoing divestment program. Companies all or partially divested since 1987 include the National Fisheries Company, BWIA West Indies Airways, National Flour Mills (NFM), the Trinidad and Tobago Electricity Commission, TT Methanol Company, Trinidad Cement, the Iron and Steel Company of Trinidad and Tobago (ISCOTT), and the Water and Sewerage Authority (WASA). In May 1997, the government sold its remaining 69% interest in the Trinidad and Tobago Methanol Company to a consortium consisting of the local firm CL Financial and Germany's Ferrostaal and Helm. NFM was divested by an additional 14% in 1997, bringing the government's holding down to 51%. The government is currently considering creating a holding company to bring its remaining shares in several formerly wholly government-owned enterprises to market.
Trinidad and Tobago's infrastructure is adequate by regional standards. The national airport has recently been expanded. There is an extensive network of paved roads, and utilities are fairly reliable in the cities. Some areas, however, especially rural districts, still suffer from water shortages, power failures, and inadequate drainage. Some companies presently constructing large industrial plants at the Point Lisas Industrial Estate in central Trinidad are concerned that water supply to their plants will not be adequate. The government is addressing this problem with the construction of a desalinization plant. Infrastructure improvement, especially rural roads and bridges, rural electrification and telephone service, and drainage and sewerage, are among the government's budget priorities, and are generously supported by the multilateral development agencies and the European Union.
Telephone service is relatively modern and reliable, although higher priced than comparable U.S. service, since the government is contractually bound to the monopoly supplier TSTT (Telecommunication Services of Trinidad and Tobago Ltd., a joint venture between the State andCable and Wireless (United Kingdom). Cellular service is widespread and has been the major area of growth for several years. A tendering offer for cellular licenses is expected to begin in 2005, which would add new cellular carriers to Trinidad and Tobago, thus expanding coverage and lowering fees. The government has protected the cellular market and prevented the opening of the telecommunications market. The Internet has come into widespread use, although service can be slow at peak times. The government has been slow to open up this market to competition as well.
GDP: purchasing power parity - $9.41 billion (1999 est.)
GDP - real growth rate: 5% (1999 est.)
GDP - per capita: purchasing power parity - $8,500 (1999 est.)
GDP - composition by sector:
agriculture:
2%
industry:
44%
services:
54% (1998 est.)
Population below poverty line: 21% (1992 est.)
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 3.5% (1999 est.)
Labor force: 558,700 (1998)
Labor force - by occupation: construction and utilities 12.4%, manufacturing, mining, and quarrying 14%, agriculture 9.5%, services 64.1% (1997 est.)
Unemployment rate: 14.2% (1998)
Budget:
revenues:
$1.54 billion
expenditures:
$1.6 billion, including capital expenditures of $117.3 million (1998)
Industries: petroleum, chemicals, tourism, food processing, cement, beverages, cotton textiles
Industrial production growth rate: 7.5% (1995)
Electricity - production: 4,763 GWh (1998)
Electricity - production by source:
fossil fuel:
99.27%
hydro:
0%
nuclear:
0%
other:
0.73% (1998)
Electricity - consumption: 4,430 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: cocoa, sugarcane, rice, citrus, coffee, vegetables; poultry
Exports: $2.4 billion (f.o.b., 1998)
Exports - commodities: petroleum and petroleum products, chemicals, steel products, fertilizer, sugar, cocoa, coffee, citrus, flowers
Exports - partners: United States 36.9%, Caricom countries 29.4%, Central and South America 9.7%, European Union 6.3% (1998)
Imports: $3 billion (c.i.f., 1998)
Imports - commodities: machinery, transport equipment, manufactured goods, food, live animals
Imports - partners: United States 44.7%, Latin America 18.9%, European Union 13.7%, Japan 4.8% (1998)
Debt - external: $2.2 billion (1997 est.)
Economic aid - recipient: $121.4 million (1995)
Currency: 1 Trinidad and Tobago dollar (TT$) = 100 cents
Exchange rates: Trinidad and Tobago dollars (TT$) per US$1 - 6.2697 (January 2000), 6.2963 (1999), 6.2983 (1998), 6.2517 (1997), 6.0051 (1996), 5.9478 (1995)
Fiscal year: 1 October - 30 September