The International Monetary Fund has forecasted global economic growth for 2024 at 3.1 percent, the same rate as estimated for 2023. Most central banks in advanced and emerging market economies have either held their policy rates stable or have lowered them in recent months. The United States Federal Reserve maintained its federal funds target range at 5.25 to 5.50 percent in March 2024. Domestically, Trinidad and Tobago’s economy showed continued recovery driven by non-energy activity in 2023, with a 3.6 percent increase in Real GDP during the second quarter.
The Central Statistical Office reported a decline in the unemployment rate to 3.2 percent in the third quarter of 2023, down from 3.7 percent in the previous quarter. Inflation rose to 0.8 percent year-on-year in February 2024, with core inflation remaining at one percent and food inflation at 0.1 percent. Financial sector liquidity remained ample but skewed, with strong private sector credit growth. In the twelve months to January 2024, financial system credit grew by 7.9 percent, driven by lending to businesses and consumers.
Interest rates on 3-month treasuries in Trinidad and Tobago have trended upwards, narrowing the interest differentials with the United States. The Monetary Policy Committee noted global economic conditions and uncertainties regarding major central banks’ policy paths. The Trinidad and Tobago economy continued steady recovery supported by credit expansion, with inflation below 1 percent and narrowing short-term interest differentials. The MPC decided to maintain the repo rate at 3.50 percent.
The Central Bank will continue to monitor international and domestic developments closely and analyze prospects. The next Monetary Policy Announcement is scheduled for June 28, 2024. Overall, Trinidad and Tobago’s economy is on a path of steady recovery, with indicators pointing to continued growth in the Wholesale and Retail and Construction sectors. Despite some fluctuations in financial institutions’ liquidity positions, credit expansion remains strong, supporting the economy’s recovery.
While uncertainties remain regarding global economic conditions and major central banks’ policies, the Trinidad and Tobago economy is expected to continue its recovery path. With inflation below 1 percent and narrowing interest differentials with the United States, the Central Bank is focused on maintaining stability and monitoring developments to ensure sustainable economic growth. The decision to maintain the repo rate at 3.50 percent reflects the Bank’s commitment to supporting the economy while managing risks and uncertainties in the current environment.
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20 Comments
I think the Central Bank should have increased the repo rate for economic stability.
I respectfully disagree. Raising the repo rate could stifle economic growth and burden consumers with higher borrowing costs. Its a delicate balance that the Central Bank must consider. Lets hope they make the right decision for the overall well-being of the economy.
I think the Central Bank should have increased the repo rate for better economic stability.
I disagree. Raising the repo rate could stifle economic growth and burden borrowers. Lower rates encourage spending and investment. Its a delicate balance. Lets consider the broader implications before jumping to conclusions.
I think the Central Bank needs to be more aggressive with rate changes.
Aggressive rate changes by the Central Bank can have serious consequences, like destabilizing the economy and creating uncertainty for businesses and consumers. Its important to consider the long-term effects of these decisions rather than just focusing on short-term gains.
This is just the central bank playing games with our economy again.
The central banks actions may seem like games, but they are essential for stabilizing the economy. Without their intervention, we could face even greater financial turmoil. Lets trust in their expertise and focus on the bigger picture.
I think the Central Bank should have increased the repo rate! Thoughts?
I think the Central Bank should have raised the repo rate for better economic stability.
I think the Central Bank should lower the repo rate to stimulate economic growth.
I dont get why they dont just abolish the repo rate altogether.
Interesting move by the Central Bank. Wonder how this will impact the economy.
Seems like Central Bank is playing it safe with the repo rate. Thoughts?
Do you think the Central Bank should have lowered the repo rate instead?
Why isnt the repo rate being lowered to stimulate the economy? 🤔
I think the Central Bank should have lowered the repo rate for economic growth.
Lowering the repo rate might boost short-term growth, but it can also lead to inflation and create more economic instability in the long run. Its a risky move that could have unintended consequences. The Central Bank needs to weigh all factors carefully before making such decisions.
Do you think the Central Bank should have lowered the repo rate instead?
Absolutely not. Lowering the repo rate would have only fueled inflation and devalued the currency further. The Central Bank made the right call to maintain the rate. Its about long-term stability, not short-term gains.