Summary of Report -
Frustration among the public and business community with the state of emergency and curfew imposed in August is likely to grow in the short term. The opposition Congress of the People (COP) will continue to question its effectiveness as an anti-crime strategy. A sustained reduction in crime will not be achieved until wide income disparities are resolved and reforms of the police and judiciary are enacted. Policymaking will be complicated in 2012-13 by the persistent weakness of the non-energy sector, turbulence in global financial markets and the risk of a further recession in the US, Trinidad and Tobago's main trading partner. The Economist Intelligence Unit expects energy-sector revenue to continue to support the public finances in 2012-13 as public spending increases, outstripping revenue growth. Easing oil prices will be less supportive and gas prices will rise only gradually, remaining well below their 2004-08 average. We expect the deficit to be 4.3% of GDP in fiscal year 2011/12 (October-September)
Key changes from last month
Political stability will be threatened in the short term by mounting public frustration over the state of emergency that has been in place since August 22nd, and its continuing impact on businesses.
Economic policy outlook
Policymaking will be challenged over the medium term by the persistent weakness of the domestic non-energy sector and the poor global outlook. However, strong savings will allow the authorities to continue to enact counter-cyclical policies.
Following a weak estimated performance in 2011 (real GDP expansion of just 1%), we expect growth to improve only marginally in 2012, to 1.6%, as a result of the poor global outlook, before picking up more strongly in 2013.
Country Risk Service Trinidad and Tobago November 2011 Updater: , is available at:
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