Macro Economic Objective on the Health of the Economy of Trinidad and Tobago
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Data for the economy of Trinidad and Tobago was collected from the CSO (Central Statistical Office) Information was collected for the period (1995- 2005) in the areas of economic growth as represented by changes in GDP (Gross Domestic Product) as well as GNP (Gross National Product), unemployment, inflation and the balance of payments. This data was then evaluated and analysed to determine major trends or findings and make recommendations.
* To produce a statistical report on the economic health of the Trinidad and Tobago economy base on the performance of key macro-economic indicators.
* To examine the implications of the trends observed in the data.
* To make recommendations that can improve the quality of life or the standard of living for citizens in the Trinidad and Tobago economy.
PREASENTATON OF DATA:
GDP (Gross Domestic Product) VS GNP (Gross National Product) statics for Trinidad and Tobago.
Table 1 showing GDP figures for the years (1995-2005)
YEAR| GDP (TT$ Billions)|
GRAPH 1. SHOWING gdp figures for the year (1995-2005)
GDP STATISTICS EXPOUNDED
The economy of Trinidad and Tobago for the year (1995 -2005) continues to experience affirmative economic growth. Economic growth is defined as an increase in the level of output produced in an economy as measured by GDP. Real GDP measures the volume of goods and services produced otherwise known as the level of real output. As real GDP rises, it means that production and consumption of goods and services produced throughout the economy would have expanded. The growth rate of an economy is measured by calculating the annual change in real GDP. In calculating Real GDP a GDP deflator or price index is used.
ie: Change in Real GDP × 100 Initial years GDP
table (1.1) shows the reasulting conversions of nominal gdp into real gdp. Year| Price Index or GDP Deflator (%) | Nominal GDP (Current Prices in Millions)| Real GDP (Constant Prices in Millions) | 1995| 91| | |
1996| | | |
1997| | | |
1998| | | |
1999| | | |
2000| | | |
2001| | | |
2002| | | |
2003| | | |
2004| | | |
2005| | | |
TABLE (1.2) SHOWING GNP FIGURES FOR THE PERIOD (1999-2005) YEAR| Gross national product(tt$ billions)|
GRAPH (1.1) SHOWING GNP STATICS FOR THE YEAR (1995-2005)
Gross National Product is gross domestic product adjusted for net property income from abroad. This requires that receipts of factor incomes from the rest of the world are added to GDP, while payments of factor incomes to the rest of the world are subtracted. Although GDP is the measure of output produced within an economy, it turns out that some production facilities in a country would be foreign owned an associated income would accrue to foreigners .for example the profit earned by BPTT, the Trinidad and Tobago subsidiary British Petroleum, is repatriated to its foreign shareholders. Such outflows of income must therefore be subtracted from GDP in the calculation of GNP. By the same token, nationals of a country may own productive resources in foreign economies. All income generated from such foreign assets therefore provide an additional source of income to the home economy. For example, the divided received by a Jamaican investor who invests in Trinidad Publishing Ltd represents an inflow of income to Jamaica from abroad .such income is added to GDP in the calculation of GNP.
table (1.3) showing the COMPARISON OF GDP AND GNP STATICS FOR
TRINIDAD AND TOBAGO.(1995-2005)
YEAR| GDP FIGURES (TT$BILLION)| GNP FIGURES (TT$BILLION)| 1995| 31.7| 28.8|
1996| 34.6| 31.5|
1997| 35.9| 33.4|
1998| 38.1| 35.9|
1999| 42.9| 40.4|
2000| 51.4| 47.4|
2001| 55.0| 51.7|
2002| 56.3| 53.3|
2003| 70.7| 66.5|
2004| 79.8| 77.3|
2005| 95.1| 91.6|
GRAPH (1.2) showing A COMPARISON OF GDP AND GNP LEVELS
WHY SHOULD GDP DATA BE COATED FOR TRINIDAD AND TOBAGO RATHER THAN GNP DATA
For example in the reading of the budget the finance minister used GDP figures to talk about the government’s management of the economy in the year (2010-2011). GDP statics however does state to a population listening to the budget about the efficiency of the government in stimulating or increasing production from locally owned factors of production. GDP statics for Trinidad and Tobago however are always more attractive than GNP statics as demonstrated in table 1.3 and graph 1.2. Because GDP statics look and sound superior they are the choice of politicians who always aim to impress. From graph 1.2 we see that when consideration is given to net property income from abroad GNP is always less than GDP for the Trinidad and Tobago economy. This is because of the large multinational (MNC) presence in its most thriving economic sector. (A multinational corporation MNC is a business which has operations in multiple countries).the significant gap between GDP and GNP figures over the 10 year period under consideration suggests that local production has been less attractive than a combine figure of both local and foreign based production. Thus GDP as an economic static that reflect production in a multinational dominated production sector is not as effective as an indicator of meaningful productivity as GNP.