Perhaps the most immediate downside risks to emerging markets, including Trinidad and Tobago, relates to shifting expectations about the future path of US monetary policy. With firmly anchored inflation expectations, the Central Bank is giving more weight to an accommodative monetary stance until a firm domestic economic turnaround is established.
However, we are paying close attention to the possibility of normalization of monetary policy in the United States. Should the outlook for inflation, growth, or financial stability change, we will take appropriate action. Here at home, certain domestic factors seem to suggest a more optimistic outlook for 2014.