about 4% of GDP. The net asset value of the Heritage and
Stabilization Fund (HSF) stood at USD5 billion at the end of
July 2013 following transfers of USD42.5 million during the
fiscal year. As at the end of March 2013, the country’s total
public sector debt stood at 54.3% of GDP, a decline from
the 57% of GDP recorded at the end of September 2012.
Contingent liabilities represented 17.4% of GDP at the end
of March 2013, while external debt of central government
were at a stable 6.3% of GDP.
For the first quarter of 2013, the external accounts registered
an overall deficit of USD14.8 million, reversing the surplus
of USD62.2 million recorded in the first quarter of 2012. For
the period, the external current account registered a deficit
of USD185.1 million, smaller than the USD739.1 million
recorded in the corresponding period a year earlier, while the
capital and financial account ended with a surplus. As at the
end of the first quarter of 2013, the country’s net international
reserves (NIR) stood at USD9.2 billion, which provides about
10.3 months of import cover. NIR grew slightly to USD9.3
billion at the end of August 2013.
Figure 1
Non-Energy Sector Performance (Year on Year, percentage change)
Source: Central Bank of Trinidad and Tobago, First Citizens
Research & Analytics
Figure 2
Energy Sector Performance (Year on Year, percentage change)
Monetary conditions remained fairly stable during the first
9 months of 2013. Inflation has averaged just about 5.5% for
the period, while core inflation, which strips out the volatility
of food prices, averaged 2.5%. The TTD/ USD exchange rate
also traded tightly, averaging TTD6.41 to the US dollar, with
an average buy/ sell spread of TTD0.05. Amid the sluggish
economic growth and tepid inflation environment, the
central bank has maintained an accommodative monetary
policy stance, keeping the repo rate steady at 2.75% since
September 2012.
Since April 2013, there has been a few government bond
issues in the market. In May 2013, the Government issued
a TTD1 billion 7-year bond, with a coupon rate of 2.6%.
The issue was oversubscribed and subsequently issued at
a premium with an issue yield of 1.95%. On 6 August, the
Government came to market again with a TTD1 billion, 2.5%
fixed rate bond. However, the security was undersubscribed.
The total amounted allotted was just around TTD560 million.
The bond was subsequently issued at par. According to the
central bank, the bond was undersubscribed primarily due to
an alternative investment product being offered in the market
simultaneously. The First Citizens initial public offering
(IPO) was opened on 15 July and closed on 12 August. {The
IPO was three times oversubscribed (see Trinidad and Tobago
Stock market commentary for more details)}. In October,
the National Insurance Property Development Company
(NIPDEC) issued a 16-year, TTD1 billion bond, which was
oversubscribed. The issue yield came out at 3.8%, compared
to the coupon rate of 4.0%.
Source: Central Bank of Trinidad and Tobago, First Citizens
Research & Analytics
Figure 3
Government Debt (Percent of GDP)
Source: Central Bank of Trinidad and Tobago, First Citizens
Research & Analytics
25