TT economy to grow 6.7% in fiscal year

Economic growth estimated at 6.7 percent in fiscal 2005/2006 is expected to average 7.2 percent over the next period 2006/2008.

Continued growth is expected to be driven primarily by the energy sector, which has been estimated to expand by an average of 8.5 percent.

The non-energy sector is forecast to grow at a steady pace of about four percent per annum over the period.

According to a Budget document, the pick-up in world economic growth and trade over the last year will complement the increased activity within both the energy and non-energy sectors.

The rate of inflation is anticipated to remain at an average of 4.9 percent over the medium-term.

With the TT economy operating at or near capacity, unemployment reached an all-time low in 2005, and is expected to remain that way over the medium-term. The external account is projected to continue to record large surpluses reaching 9.3 percent of GDP by 2008.

This activity will largely be supported by increased energy exports as well as sustained levels of exports from the non-traditional sectors.

Imports of capital goods will remain substantial over the medium-term, while gross official reserves are expected to remain strong, increasing from 6.5 months of prospective imports in 2004 to about 10.3 months by 2008.

The public sector external debt stock is programmed to decline from US$1,350.6 million in 2004 to US$1,085.4 million in 2008 as a result of extensive amortisation over the period. Consequently, the country’s debt service ratio is slated to fall from five percent to 1.3 percent while the interest service ratio will reduce from 1.7 percent in 2004 to 0.7 percent in 2008.