Economy of Trinidad and Tobago

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Economy of Trinidad and Tobago
Port of Spain night skyline 2008.jpg
Downtown Port of Spain at night
Currency Trinidad and Tobago dollar (TTD)
1 October - 30 September
Trade organisations
CARICOM
Statistics
GDP $27.12 billion (2012 est.)
GDP growth
0.7% (2012 est.)
GDP per capita
$20,400 (2012 est.)
GDP by sector
agriculture: 0.3%; industry: 58.8%; services: 40.8% (2012 est.)
8.7% (2012 est.)
Population below poverty line
4% (2007 est.)
Labour force
616,500 (2012 est.)
Labour force by occupation
agriculture: 3.8%; manufacturing, mining, and quarrying: 12.8%; construction and utilities: 20.4%; services: 62.9% (2007 est.)
Unemployment 6.3% (2012 est.)
Main industries
petroleum and petroleum products, liquefied natural gas (LNG), methanol, ammonia, urea, steel products, beverages, food processing, cement, cotton textiles
68th[1]
External
Exports $12.72 billion (2012 est.)
Export goods
petroleum and petroleum products, liquefied natural gas (LNG), methanol, ammonia, urea, steel products, beverages, cereal and cereal products, sugar, Cocoa, coffee, citrus fruit, vegetables, flowers
Main export partners
 United States 40.3%
 Argentina 6.9%
 Chile 6.8%
 Jamaica 4.9%
 Spain 4.3% (2012 est.)[2]
Imports $9.362 billion (2012 est.)
Import goods
mineral fuels, lubricants, machinery, transportation equipment, manufactured goods, food, chemicals, live animals
Main import partners
 United States 30.8%
 Colombia 13.9%
 Brazil 7.6%
 Gabon 5.0%
 Canada 4.1%
(2012 est.)[3]
$4.78 billion (31 December 2012 est.)
Public finances
37.7% of GDP (2012 est.)
Revenues $9.507 billion (2014 est.) [4]
Expenses $10.186 billion (2014 est.) [5]
A+ (Domestic)
A (Foreign)
AA (T&C Assessment)
(Standard & Poor's)[6]
Foreign reserves
$9.4 billion (9 September 2013 est.)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Trinidad and Tobago is one of the wealthiest and most developed nations in the Caribbean and is listed in the top 66 High Income countries in the world. In the Caribbean, it is one of the richest countries, with a per capita GDP of USD $28,400 (2009). In November 2011, the OECD removed Trinidad and Tobago from its list of Developing Countries. Trinidad and Tobago has earned a reputation as an excellent investment site for international businesses and has one of the highest growth rates and per capita incomes in Latin America. Recent growth has been fueled by investments in liquefied natural gas (LNG), petrochemicals, and steel. Additional petrochemical, aluminum, and plastics projects are in various stages of planning. Trinidad and Tobago is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources but it also supplies manufactured goods, notably food and beverages, as well as cement to the Caribbean region. Oil and gas account for about 40% of GDP and 80% of exports, but only 5% of employment.

Regional Financial Center[edit]

The country is also a regional financial center, and tourism is a growing sector, although it is not proportionately as important as in many other Caribbean islands. The economy benefits from a growing trade surplus. Economic growth reached 12.6% in 2006 and 5.5% in 2007 as prices for oil, petrochemicals, and LNG remained high, and as foreign direct investment continued to grow to support expanded capacity in the energy sector.

Trinidad and Tobago's infrastructure is adequate by regional standards. A major expansion of the Piarco International Airport in Trinidad, the country's main airport, was completed in 2001. There is an extensive network of paved roads, and utilities are fairly reliable in the cities. Some areas, however, especially rural districts, still suffer from water shortages. The government is addressing this problem with the construction of additional desalinization plants. Infrastructure improvement, especially rural roads and telephone service, drainage, and sewerage, are among the government's budget priorities.

Communications and Mobile[edit]

Telephone service is relatively modern and reliable. Mobile phone service is widespread and has been the major area of growth for several years. Digicel and Laqtel were granted cellular licenses in 2005, breaking TSTT's monopoly. The Internet has come into widespread use, although service can be slow at peak times. The government has been slow to open up this market to competition as well.

Energy Sector[edit]

Trinidad and Tobago has been involved in the petroleum sector for over one hundred years undertaking considerable oil and gas exploration activity on land and in shallow water with cumulative production totaling over three (3) billion barrels of oil. As the largest oil and natural gas producer in the Caribbean, Trinidad and Tobago’s hydrocarbon sector moved from an oil dominant to a mostly natural gas based sector in the early 1990s. Proven crude oil reserves in 2013 were estimated at, 728 million barrels according to the EIA while 3P natural gas reserves were 25.24 trillion cubic feet (Tcf) (Ryder Scott Audit 2012).


Trinidad and Tobago houses one of the largest natural gas processing facilities in the Western Hemisphere. The Phoenix Park Gas Processors Limited (PPGPL) natural gas liquids (NGL) complex is located in the Port of Savonetta. It has a processing capacity of almost 2 billion cubic feet (Bcf) per day and an output capacity of 70,000 barrels per day (bbl/d) of NGL. After processing the gas is then transferred to the various power generators (POWERGEN, TGU or Trinity power) for generation of electricity and to the petrochemical plants for use as a feedstock.

The electricity sector is fueled entirely by natural gas. Trinidad Generation Unlimited power plant, the second combined cycle plant in the country with a generating capacity of 720 Mega Watts was opened on October 31, 2013.


With 11 ammonia plants and seven methanol plants, Trinidad and Tobago is the world’s largest exporter of ammonia and the second largest exporter of methanol, according to IHS Global Insight (2013). Overall production and export for ammonia, methanol, urea and UAN decreased to 428,240 Metric Tonnes (MT) in 2013 from 564,892 MT in 2012.

A diversified energy sector that focuses on production further down the gas value chain maximizes the multiplier effects and value added through the creation of stronger linkages between the energy sector and the rest of the economy. Investments in such projects represent a shift away from the traditional petrochemicals which target foreign markets. The use of more complex petrochemicals locally will expand and deepen growth in the local manufacturing sector, increase employment and increase the country’s GDP. With this vision in mind, the MEEA continues to hold discussions and negotiations with potential investors for downstream projects. Some of these potential downstream and manufacturing projects range from the manufacture of calcium chloride to dimethyl ether (DME).

Looking to the future of downstream gas markets, gas production from non-traditional sources has the potential to transform the global energy landscape. The United States (US) has traditionally relied on imports for its natural gas needs. Emerging shale gas production has brought prices down, encouraging the revival of some idled ammonia and methanol plants and the construction of new facilities that will commence operation over the next few years. This represents a threat that can negatively impact Trinidad and Tobago’s traditional gas markets in the US.

The energy sector accounts for around 45.0% of the country’s GDP, a core driver of the economy. According to the Central Bank, Real GDP growth in Trinidad & Tobago is set to rise to 2.6% in 2014, up from 1.6% in 2013, as the country’s energy sector recovers from maintenance delays that weighed on economic activity in the third quarter of 2013. Moreover, low interest rates will continue to bolster household consumption, while public investment in infrastructure will see stronger growth in the construction sector.

Production of liquefied natural gas (LNG) is forecasted to rebound in the coming months, returning to full capacity. Indeed, our Oil & Gas team forecasts LNG production to rise by 2.0% to 40.0bcm in 2014, following an estimated 1.5% drop in production in 2013. Moreover, production of petrochemicals is also likely to rebound, following an 8.0% drop in output in the third quarter of 2013, as several companies aligned their production schedules with the natural gas shortfall.

The energy sector continues to be integral to the long-term economic growth and development of the country contributing significantly to Government revenue, export earnings as well as GDP.[7]

Job Market[edit]

The Job market in Trinidad and Tobago stands at a very lucrative position. According to the[8] Organization for Economic Co-operation and Development (OECD), in October 2011 when its Development Assistance Committee (DAC) released its list, Trinidad and Tobago were no longer on that list for the first time in history. In essence this means that the nation of Trinidad and Tobago is no longer considered a developing nation, but can be enlisted among the developed nations of the world. In addition the thriving energy sector, the nation controls 0.25%[9] of the world's natural gas with a GDP of twenty billion US dollars (US$20.5b).[10] These factors are quintessential in driving the demand for quality labor, especially in specialized area as it pertains to the energy sector. Such area of specialization are for the first time in history being sort after in this little nation, but requires the expertise of ex pats to fill. According to former Prime Minister Patrick Manning,[11] the nation is the financial capital of the Caribbean, and being so heavily reliant on the oil and energy sectors, fosters and facilitates an environment of constant demand for specialized jobs.In addition, the Natural Gas sector is for the first time facing competition from countries such as Qatar and the United States. All these factors are stimulating the need to produce local specialist as the demand increases.They are also clear indications that the nation is at the end of an economic downturn and poised for a period of economic boom.

A wealth of Jobs would be created in the short run to feed a diversity of economic demands across all sectors of the economy. Finance Minister Winston Dookeran unveiled the largest Budget (TT$54b) in the history of the nation in October 2011, reiterating the Government's resolve to transform the economy, which will boost investor confidence in the nation. This process of transformation will create a hosts of jobs and numerous foreign investor opportunities.[12] The proverbial wheels of the economy are being oiled the economy and other areas of the economy such as the Financial and Manufacturing Sectors will benefit tremendously from the spin offs.

Government Ministers have already made plans to facilitate viable tools in assisting with the roll out. Within the past couple years Government agencies have begun to utilize recruitment tools such as Agencies and job boards.[13] The government have recognized the usefulness in sourcing and outsourcing labor from different areas. Recruitment on the whole in Trinidad and Tobago have experienced huge strides, from the traditional snail mail to company's emails and job boards. Local experts have mentioned that moving forward in such a small area is a big tool to in executing and rolling out macro plans smoothly.

Tourism[edit]

Tourism is another area that is poised to see a quantum leap and the demand for a plethora of jobs. The European Union Council on Tourism and Trade (EUCTT) has also awarded the nation as being "The Best Tourist Destination for 2012". Local hotels have already began to make plans to facilitate an influx of European tourists upon the nation receiving the prestigious designation.[14] However, the EUCTT is not affiliated with any part of the European Union's Institutions.[15] Despite concerns over the global economy, international tourism demand continues to show resilience. The number of international tourists worldwide grew by 5% (22 million) between January and June 2012, with Asia and the Pacific (+8%) leading the growth among the regions. Given this growth rate a total of one billion international tourists are expected by the end of 2012. In 2011, the total contribution of World Travel & Tourism to global GDP was USD6,346.1Bn (9.1% of GDP). In 2011, the Caribbean region received 20.9 million tourists, a growth of 4.4% over the same period in 2010. The Caribbean is the most dependent region on tourism with Travel and Tourism contributing 13.9% (USD47.1Bn) to its economic output. Trinidad and Tobago received an estimate of 402,058 visitors in 2011, representing 2% of all Caribbean visitor arrivals. Due to the multifaceted nature of tourism, its economic impact is not confined to any single industry. To adequately measure the economic impact of the tourism sector, the United Nations World Travel and Tourism Council (UNWTO) devised the Tourism Satellite Account (TSA), an extension of the System of National Accounts (SNA). The TSA is a detailed production account of the tourism sector showing its linkages to major industries, total employment, capital formation and additional macro-economic variables.[16]

Miscellaneous[edit]

Economic aid - recipient: $200,000 (2007 est.)

Reserves of foreign exchange and gold: $6.761 billion (31 December 2007 est.)

Currency: 1 Trinidad and Tobago dollar (TT$) = 100 cents

Exchange rates: Trinidad and Tobago dollars (TT$) per US$1 :

6.4200 (2011 est) 6.3337 (2010) 6.3099 (2009) 6.2896 (2008) 6.3275 (2007) 6.3107 (2006) 6.2842 (2005), 6.2990 (2004), 6.2951 (2003), 6.2487 (2002), 6.2332 (2001), 6.2697 (2000), 6.2963 (1999), 6.2983 (1998), 6.2517 (1997), 6.0051 (1996), 5.9478 (1995)

Stock of direct foreign investment - at home: $12.44 billion (2007)

Stock of direct foreign investment - abroad: $1.419 billion (2007)

Market value of publicly traded shares: $15.57 billion (2006)

Fiscal year: 1 October - 30 September

See also[edit]

References[edit]

External links[edit]