Last update: 13-Dec-2013 12:16 am
Friday, December 13, 2013
Trinidad & Tobago Guardian Online
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Economist challenges Howai’s growth claims
Senior lecturer in economics at the University of the West Indies (UWI) Dr Roger Hosein is challenging Finance Minister Larry Howai’s claim that the T&T economy recorded four consecutive periods of positive growth. In a budget analysis sent exclusively to the T&T Guardian, Hosein produced statistics from 2010 to 2013 showing growth in the petroleum and non-petroleum sector. He said data obtained from the Central Bank showed two periods of negative growth in the second and fourth quarters of 2012.
While there was positive growth of 0.66 per cent, Hosein said upon closer investigation contraction in economic activity was spread over all sectors of the economy in 2011. “The construction sector suffered the most severe contraction (8.8 per cent) followed by a 3.9 per cent decline in the petroleum sector which was dominated by the 4.7 per cent decline in petrochemicals,” Hosein said. He added that there had been three consecutive years of decline in the non-petroleum sector from 2009 to 2011.
“The non-petroleum sector declined by almost five per cent in 2009, with agriculture and distribution subsectors accounting for most of this decline as they contracted by 32 per cent and 20 per cent respectively. By 2010 the rate of contraction slowed to 2.6 per cent in the non-petroleum sector with the construction sector suffering the most severe decline of 28 per cent,” Hosein said.
He noted that in 2012, the Central Statistical Office estimated 1.9 per cent growth in the construction sector mainly driven by distribution and finance, insurance and real estate.
“The petroleum sector is projected to have declined by one per cent but is expected to be revised downwards due to the greater than expected effects of maintenance activity in the sector for 2012. Global economic growth remained unmoved in 2012. High levels of uncertainty persisted in the global economic environment due to the ongoing effects of the sovereign debt crisis in Europe,” Hosein explained.
Hosein said Caribbean growth was estimated to be 1.3 per cent in 2012 compared to one per cent in 2011, according to data from the International Monetary Fund. “Problems in these economies were dominated by debt and dwindling external demand. Tourism-dependent economies were more vulnerable to the effects due to the weakening of the European economy,” he said. Quoting from the 2013 World Economic Outlook, Hosein said the IMF had forecast a global economic growth rate of 3.3 per cent this year.
He said in the first quarter of 2013 the T&T economy grew by 1.7 per cent.
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