TT a sure bet says Scotiabank boss

Robert Pitfield, Chairman of Scotiabank Trinidad and Tobago Limited, is an optimistic man. He is upbeat about the resilience of the global economy and he is sure about Trinidad and Tobago’s economic performance during the next few years. Addressing the Annual General Meeting of Scotiabank Trinidad and Tobago Limited recently, Pitfield expressed his belief that the next few years held great opportunities for Trinidad and Tobago. “This is an era of great promise for the country,” he said. “TT has been called an oasis of macroeconomic stability and growth within the Latin American and Caribbean region.”

The economy, he predicted, would expand by over four percent, continuing a decade-long trend of solid growth. A review of the country’s performance for the fiscal year 2003, revealed economic growth in the order of six to seven percent, in addition to reduced inflation and falling interest rates. “Trinidad and Tobago,” Pitfield continued, “is one of the few growing economies in the Americas to boast a twin surplus on fiscal and current accounts — and thanks to the energy sector, this is expected to continue in the years ahead.” He noted that in the absence of adverse price shocks, energy products would continue to drive economic growth. Additionally, the external debt continued to decline, with Standard and Poor’s upgrading TT’s foreign currency sovereign rating in April to BBB with a stable outlook. However, he maintained, the level of unemployment continued to rise, raising concern among rating agencies.

Maintaining that economic diversification remained a challenge for TT, Pitfield called for improvements in infrastructure in order to attract necessary foreign investment beyond the upstream oil and gas sectors. He said, “it is clear that the oil and gas industry also provides much needed employment, so it is encouraging to see the Government continue to focus on this sector. Plans to build a technology park in Trinidad should be commended.” In 2003, the growth in the energy sector stood at 9.5 percent, with the resultant impact of increased revenues generating a fiscal surplus of TT $28.9 million. From June 2003, the country’s external reserves stood at a healthy US $2.4 billion, the equivalent of 8.5 months of import cover.

However, Pitfield noted, while there were many good things in store for TT’s future, local manufacturers faced a number of challenges, particularly in the form of increased competition as a result of more open trade through the Free Trade Area of the Americas (FTAA), scheduled for 2005. Nonetheless, he said the manufacturing industry would rebound, showing “resilience and grit.” “The strength of TT’s manufacturing sector is well recognised in this region,” he said and supported government’s 20/20 vision. On the global economy, Pitfield drew reference to what he called a synchronised recovery among major industrialised nations, led by the US, and supported by low interest rates, well controlled inflation and solid GDP growth.

Trade and investment flows between nations, he said, has been and will continue to be affected by volatility in global foreign exchange markets, especially the depreciation of the US dollar as well as by trade liberalisation initiatives. Securities markets, he continued, remain jittery. However, equity markets have enjoyed a steady rally since March 2003 as investors and regulators addressed the corporate scandals and corporate debt excesses of the late nineties. “Government bond yields in developed countries,” he noted, “should continue to move higher as global investors become increasingly nervous about the financing needs of enormous US trade and fiscal deficits and a weakening US dollar.”