innovative financial instruments that can incentivise private capital to flow into climate related efforts. without a fundamental shift in the way the international monetary and financial systems address climate finance, we risk exacerbating environmental degradation and global inequality. 10. we live in an era of high uncertainty and turmoil, where the job of policy makers is something like steering a vast, interconnected fleet through turbulent seas, where the old maps no longer suffice. the time for incremental changes has gone. what is needed now is a transformative action agenda which would ensure that the global economic and financial architecture serves all nations and peoples and not just a select few. with collective action and renewed commitment to multilateralism, we can build an international monetary and financial system that is truly fit for the 21st century. ii. economic and financial fragmentation 11. global co - operation and the integration of global markets, in particular, were instrumental in driving decades of world growth. for many low - income countries and emerging markets, this integration into the global economy was a crucial contributor to their development. it provided them access to affordable imports, extensive export markets, and foreign technology. now, however, geo - economic fragmentation is weighing on the outlook for global growth. 1 the geopolitical risk index 2 has spiked sharply in 2024 amidst increases in trade restrictions and financial sanctions. this has reversed the substantial benefits from global economic integration 3. there are now fears of de - globalization and increasing regionalization. this could dampen the convergence of emerging and developing economies to better living standards. geopolitical risks are also imparting heightened volatility to capital flows and asset prices. they are also undermining the efficiency of the global payments systems. 12. cross - border flows of goods, services, and capital have levelled off since the global financial crisis. recent geopolitical events have further fuelled protectionism alongside an increase in trade and logistics disruptions 4. for many low - income countries a study by imf staff in august 2023 suggested that greater international trade restrictions could reduce global economic output by as much as 7 percent over the long term, or about usd 7. 4 trillion in today ’ s dollars. that is equivalent to the combined size of the french and german economies, and three times sub - saharan africa ’ s annual output ( the high cost of global economic fragmentation, imf blog, august 2023 ). caldara, dario. and iacoviello, matteo ( 202

in the pace of project execution at the level of the central government. on - going large public sector projects include the point fortin highway, the children ’ s hospital and the national aquatic centre. these, combined with other projects undertaken by the private sector, are expected to further boost non - energy activity. improving energy output should also have a positive impact on non - energy growth. • third, the central bank has begun to implement its resolution strategy for clico. this strategy always envisaged the sale of clico ’ s traditional book of business to a third party insurance company. as we undertake this sale and transfer of the portfolio, in accordance with legislative requirements, clico ’ s traditional policyholders have nothing to worry about. they will continue to be serviced by clico. the long - standing clico issue, when successfully concluded, should give a further boost to overall confidence, and reinforce the positive economic growth trend. • on this basis the central bank expects real gdp growth to strengthen to at least 2. 5 percent in 2014. over the past few years, record low domestic interest rates have contributed to consumers borrowing more to finance spending on high priced consumer durables such as motor vehicles. domestic interest rates have also fallen below or are just above those in the united states, which means investors are more likely to be attracted to seeking higher investment returns in the united states leading to capital outflows. looking ahead, the strengthening of our economic recovery, rising consumption and the threat of higher international agricultural commodity prices, all suggest inflationary pressures could increase in the coming year. with a firmly established economic recovery, the central bank will start giving more weight in its monetary policy deliberations to managing rising inflationary pressures. this will initially start with a gradual withdrawal of our accommodative monetary stance. should the outlook for inflation, growth, or financial stability change, we will take appropriate monetary action. conclusion in conclusion, i wish to reiterate that trinidad and tobago has shown tremendous resilience. yet this is not the message that we continue to absorb as a nation. instead, it usually tends to be one of negative sentiment. when i assumed office nearly 2 years ago, i faced the following economic conditions : • sharp contraction in economic growth • soaring food prices – inflation at 25 percent • declining external reserve position • weak business confidence today : • economic recovery is established – the economy is expected to grow is by at least 2. 5 percent • food price inflation is down to