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Latest Central Bank bulletin predicts modest economic uptick for 2017

The trinidad Guardian / According to the latest Central Bank Economic Bulletin released yesterday, domestic economic activity should improve somewhat in 2017.

The Report said that natural gas supplies will be helped by key energy sector projects such as EOG’s Sercan and bpTT’s Trinidad Onshore Compression (TROC) which came on-stream in the first half of the year.

Additionally, the sector will receive a significant boost from bpTT’s Juniper project which commenced operations in the third quarter of 2017.

Juniper is expected to produce up to 590.0 million standard cubic feet of gas per day (mmscf/d).

The improvement in the energy sector will result in some spillover effects into the non-energy sector.

“In light of the subdued nature of the economy, inflation should remain relatively contained for the remainder of the year, helped also by generally benign international inflation”, the Report stated.

The Central Bank Report also said energy commodity prices are unlikely to return to pre-2014 levels, but are expected to remain relatively stable in the short to medium term, aided mainly by geopolitical factors and OPEC’s decision to extend output cuts.

However, the Central Bank said that the fiscal accounts will remain challenged for the remainder of 2017 as Government’s energy revenues receive only a moderate fillip.

“On the balance of payments, some improvement should bee seen in energy exports given price and volume effects, but this will be insufficient to reverse an anticipated deficit on the external accounts for 2017 and the consequential impact on foreign reserves.”

The Central Bank also noted the prices of T&T’s major energy export commodities improved during the period January to August 2017.

The Energy Commodity Price Index, which measures the price movements of the country’s top ten energy-based commodity exports, showed an increase of 23.2 per cent (year-on-year) in international energy prices over the first eight months of 2017. Large increases in the prices of natural gas and crude oil (33.7 per cent and 21.3 per cent respectively), which together account for more than half of the index, were behind the significant rise in the overall index value. In addition, nine of the ten energy-based commodities included in the index saw increased prices over the period when compared to the same period in 2016, with only ammonia prices declining.

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