(Trinidad Express) After three years of slump, Trinidad and Tobago’s economy is not recovering, and crime and labour unrest are making matters worse.
The Central Bank sounded such warnings on Wednesday, as it revised its economic growth forecast for 2012 down from 1.5 per cent to just one per cent.
The bank also expects headline inflation, now at 9.2 per cent, to be seven to eight per cent this year.
It expressed concern that lack of adequate data may be masking the country’s real unemployment rate which, based on 2011 data, stands at 5.2 per cent.
The economic growth revision, says Central Bank Governor Ewart Williams, comes with three main downside risks: contagion from the Eurozone through trade and remittances; prolonged and antagonistic industrial relations; and crime.
Combined, all three factors could worsen the downward growth projection.
“Trinidad and Tobago’s economy has not done well in the past three years,” Williams said, “and we are waiting patiently for a recovery.”
This was after delivering the biannual Monetary Policy Report at the Central Bank, Port of Spain, yesterday.
Williams’s downward revision comes on the heels on the International Monetary Fund’s (IMF) projection that the economy is expected to grow some 1.7 per cent for 2012.
“Data for the first quarter of 2012 do not yet validate this optimism, as a further, albeit small, decline in real GDP may have occurred,” he said.
The economy, Williams said, is not growing as envisaged, noting contraction by 2.6 per cent in the third and fourth quarters of 2011.
Williams had earlier noted that the United Kingdom is in technical recession because of two quarters of economic decline.
Is T&T also in recession, he was asked.
Williams refused to use the “R” word.
“I am not sure you can translate these concepts mechanically from developed to developing countries. Our situation is more serious.
We’ve had negative growth for three years. That’s the issue. It’s not so much the quarterly variation. We’ve had negative growth for three years. That’s our challenge: how do we get out of that slump,” he explained.
