The Trinidad and Tobago (T&T) economy is now projected to grow by 1.5 per cent this year as against earlier predictions of 2.5 per cent, the Central Bank has said.
It said the local economy had grown by 1.3 per cent during the first nine months of the year, compared to 0.3 per cent for the same period last year.
In January, the Central Bank had projected 2.5 per cent economic growth for 2013 even as the Washington-based International Monetary Fund (IMF) had in March projected a 1.5 per cent growth.
The bank's monetary policy report for April 2013 maintained the 2.5 per cent outlook based on projected growth in energy output by 1.8 per cent.
"That projection was made almost to the end of 2012. At that time, we did not have the benefit of the information of what would have taken place in September this year, and it's when we got the September information we factored it into our projections," Central Bank Governor Jwala Rambarran said at the bank's inaugural monetary policy forum and release of the policy report for November.
The figures show that in the third quarter of this year, T&T recorded its largest coordinated energy maintenance effort to date.
"The subsequent shortfall in natural gas production, while anticipated, adversely affected both refining activity and output of petrochemicals, generating a decline of four per cent in energy output, and an estimated contraction of 0.5 per cent in real GDP (gross domestic product)," Rambarran said. He added that despite the ongoing global economic situation "it is definitely not all doom and gloom" for the local economic situation.
"The Trinidad and Tobago economy has shown tremendous resilience against a turbulent global backdrop, and we are seeing signs of gradual recovery from the sharp downturn that started late 2008." Rambarran noted that while businesses were reporting a slowdown in activity because of the four elections held here this year, on a macroeconomic level, energy sector maintenance "overshadowed everything.
"The last two years show how vulnerable we are to the energy sector. Large-scale maintenance by one energy company has been able to basically dampen the overall growth process. It means we have to diversify," he said.
On the other hand, the non-energy sector continued its slow but steady pace of revival, he said, providing support to the overall economy but still not enough to fully offset the drag posed by maintenance activity in the energy sector.
The non-energy sector has registered growth for the past 10 quarters to September 2013, he added, supported by the finance, construction and distribution sectors.
Rambarran said that inflationary pressures eased over the course of 2013. Headline inflation at the beginning of the year was just over seven per cent, and slowed to about 4.5 per cent by November.
He said the bank was concerned it was yet to see a pickup in business lending. Business loans from banks contracted for eight consecutive months up to September.
The bank also saw relatively strong growth in consumer lending, especially for purchases of motor vehicles, home renovation and debt consolidation.
"Certain domestic factors seem to suggest a more optimistic outlook for 2014," Rambarran said.