Trinidad And Tobago: Local Financial Conditions Remain Stable

• While food inflation is expected to be tempered by the slowdown in international food costs, adverse weather could lead to periodic spikes in domestic agricultural produce prices, the Central Bank has said.
• The Central Bank in its May 2023 Monetary Policy Report, said food inflation slowed over February, March, and April as bread and cereals, vegetable and fruit prices eased. It noted similarly, core inflation decelerated to 4.8%.
• The monetary policy committee outlined that domestic price pressures are anticipated to continue to ease in the short run, however, core inflation may be affected by the path of wage settlements, a gradual recovery of consumer demand, and possible implementation of higher utility rates.
• Energy output in the fourth quarter of 2022 rose on a year-on-year basis, while the Central Bank said available data suggests some sluggishness in non-energy output during that period. Overall energy production was fairly steady in the first quarter of 2023.
• Notably, labour market conditions improved as the unemployment rate fell and labour force participation rose in the fourth quarter of 2022 and the Central Bank highlighted that the financial system liquidity remained ample, supporting expansion in private sector credit.
• Overall, the current local climate in the twin islands will continue to support its momentum throughout 2023, with the sovereign projected to grow by 2.2% for the year, only slightly below its 2022 growth of 2.7%.

(Sources: Trinidad Express Newspapers & Fitch Solutions)