The year 2010 was another sluggish year for the economy in T&T. The economists who spoke to the Guardian shared the view that the economy fared poorly and 2011 will not be much better. Indera Sagewan-Alli said overall 2010 will be recorded as a year in which the economy performed poorly on all major indicators. Inflation reached its highest level in more than 30 years at 16.2 per cent, unemployment reached its highest in three years at 6.7 per cent while the exchange rate came under extreme pressure. She also pointed out there was a 50 per cent contraction in non-energy exports and continuous decline in both consumer and investment borrowing even as banks were flush with liquidity.
She said there was a decline in all sectors except the financial sector. She believes if there is to be recovery in 2011 it would depend on several factors. There must be a revival in the regional economy if T&T's manufacturing industry is to recover. Secondly a significant injection of Government spending via its public sector investment programme is critical to boost investor confidence, revive the construction sector, generate employment and inspire consumer spending in 2011. She added that the Government must bring closure to the Clico issue and settle wage negotiations with labour unions or else there would be productivity losses. What is most important she said is for Government to implement a medium-term operational plan with all voices from the Government speaking as one.
"Continued mixed messages, ministers speaking on issues outside their portfolios send a signal there is no cohesive sense of direction from the Government," she said. Dr Dan Mahabir expects a "stagnant" economy for 2011 and does not share Finance Minister Winston Dookeran's optimism for the new year.
He used several indicators to highlight the sluggish economy. The year is ending with an increase in unemployment "inching towards seven per cent," and with the rate of inflation remaining in "double digits." "The Government has not collected more than $40 billion in revenue for the year," he said.
He called energy sector revenues "worrying" and added that T&T is not producing as much as it was three years ago.
He said there would have to be discoveries of new oil to revive production. On the price of gas, he expects this to remain "flat" if not decline in 2011. Mahabir said recent discoveries of natural gas fields in the US would make T&T less important to the US and it would send the price of gas down internationally.
He added that the manufacturing industry would improve once the region's economies improve. "The rest of the region is expecting more tourist arrivals so this would impact positively on the manufacturing industry that exports to these Caricom territories," he said. In summing up his expectations for 2011 he does not expect growth. "I don't expect growth for 2011. One does not expect major improvements in the economy," he said.