2017年-IMF国际货币组织全球_Trinidad_and_Tobago_2017_Article_IV_Consultation_74页_1mb

2017 Article IV Consultation Summary: Trinidad and Tobago

Core Content

The 2017 Article IV consultation with Trinidad and Tobago, conducted by the IMF, focused on addressing the country's economic challenges stemming from weak growth, fiscal imbalances, and external deficits. The consultation aimed to evaluate the effectiveness of policy measures and provide recommendations to restore macroeconomic stability and support inclusive growth.

Main Economic Challenges

• Weak Growth: Trinidad and Tobago experienced weak or negative growth for several years, primarily due to low global energy prices and supply shocks. In 2016, real GDP shrank by 6 percent, with a further projected decline of 3.25 percent in 2017.
• Fiscal Deficit: The fiscal deficit increased to 12.1 percent of GDP in fiscal year 2016, though it is expected to decrease to 11.0 percent in 2017. The deficit remains a concern for long-term sustainability.
• Current Account Deficit: The current account deteriorated to a deficit of 10.7 percent of GDP in 2016, with an expected deficit of 8.5 percent in 2017, driven by low energy exports and volumes.
• Exchange Rate and Reserves: The real effective exchange rate remains overvalued, and gross reserves fell to US$9.5 billion in 2016, projected to decline by another US$1 billion in 2017. The exchange rate depreciated by about 7 percent in the second half of 2016 but has since been held constant.
• Inflation and Unemployment: Headline inflation was 3 percent and core inflation was 2 percent at the end of 2016. Unemployment rose to 4 percent in Q3 2016.

Policy Measures and Recommendations

Fiscal Policy

• The government has implemented reforms to adjust fiscal imbalances, including:
  • Reforming the energy tax regime.
  • Reducing fuel subsidies.
  • Boosting non-energy revenues.
• The draft FY2017/18 budget is projected to result in an overall deficit of 9.6 percent of GDP, an improvement of 3.5 percent of GDP compared to the previous baseline.
• Key near-term measures include:
  • Increasing the royalty rate on oil and gas extraction to 12.5 percent.
  • Unifying the corporate tax rate at 30 percent, with banks taxed at 35 percent.
  • Eliminating fuel subsidies, generating 0.3 percent of GDP in savings.
• Additional fiscal consolidation and structural reforms are recommended to achieve long-term stability.

External Sector and Foreign Exchange

• The external position has worsened due to a large terms of trade shock and low energy export prices.
• The IMF urged the authorities to address foreign exchange shortages and consider an exchange rate adjustment as part of a broader fiscal and structural reform package.
• The current account deficit is expected to continue, requiring careful management of capital flows and external imbalances.

Monetary Policy

• The Central Bank paused monetary tightening in late 2015 to support growth and manage capital flows, maintaining interest rates constant since then.
• The staff recommended a balanced approach between growth support and capital flow management.

Financial Sector

• The financial sector remains resilient and profitable.
• The Central Bank is working towards adopting Basel II standards by June 2018.

Structural Reforms

• Structural reforms are emphasized to boost potential growth, including:
  • Removing labor market distortions.
  • Improving public sector efficiency and effectiveness.
  • Enhancing the business climate for the non-energy sector.
  • Reforming state-owned enterprises and improving procurement practices.
• The creation of the National Statistical Institute is welcomed to address data shortcomings and strengthen policy-making.

Key Recommendations

• Continue fiscal adjustment measures to reduce the deficit and improve fiscal sustainability.
• Implement structural reforms to enhance growth and diversification.
• Address foreign exchange shortages and consider an exchange rate adjustment.
• Finalize reforms of the fiscal regime for oil and gas and broaden the VAT base.
• Pass long-awaited insurance legislation and improve AML/CFT frameworks.
• Enhance tax administration and reduce the cost of transfers and subsidies through better targeting.

Summary of Key Indicators

Additional Notes

• The IMF's transparency policy allows for the deletion of market-sensitive information in published reports.
• The next Article IV consultation is expected to follow the standard 12-month cycle.