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JMMB opens South Park branch
Even with indicators that 2017 will be a tough year, JMMB Investments (T&T) Limited opened its fourth banking and investment branch at South Park Mall, San Fernando, on Monday evening, with CEO Ronald Carter saying there are tremendous opportunities for growth.
“We are all here today because we don’t see our future as doom and gloom,” he said. “We have seen a significant decline in national revenue, vis a vis our expenditure. As a result of fiscal deficits over the past seven years, total public debt has been steadily increasing and now stands in excess of 80 per cent of GDP, a key economic metric and number that is likely to continue to grow until the budget is balanced.”
Carter said financial projections for fiscal year 2017/2018 indicate that revenue from energy will be approximately $2.5 billion or just five per cent of total revenue, down from 53 per cent just five years ago. He said this paints a stark reality for two revenue stories.
“The first and well known is the significance of the energy sector to our top line, but also another, that is less told and that is the growth and contribution of the non-energy sector and the one that will largely be shouldering the weight of the economy for at least the next year, if not more,” he said.
Carter said one of the anticipated effects of the recent United States presidential election is potentially greater and faster upward movement in US interest rates.
“Such a rise will put pressure on local interest rates, making it challenging, from a monetary policy perspective, as local rates will need to rise so as to maintain and adequate differential with US interest rates,” he said, adding that this requires a delicate balance as increasing domestic rates could put pressure on an already weak economy.
Noting the 10 per cent appreciation of the US dollar against other currencies since the election, Carter said this makes T&T’s US dollar foreign reserves more valuable,.
“However, without a similar depreciation of the TT dollar, our currency becomes further from being fairly valued,” he said.
Carter warned against subsidising import consumption at inappropriately low foreign exchange rates which would be a drain on precious foreign reserves.
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