Trinidad and Tobago has not been in a recession for the last year and instead the economy has settled at a lower level, according to the managing director of Bourse Securities, Subhas Ramkhelawan.
Ramkhelawan was speaking on CNC3’s The Morning Brew when he responded to Trade and Industry Minister Paula Gopee-Scoon’s declaration that the country is no longer in a recession.
Ramkhelawan said: “A recession is technically defined as two consecutive quarters of economic decline.”
He added that“maybe somebody could say, technically, we are out of the recession, but that has been the case for probably a year or so.”
Gopee-Scoon’s declaration came a day after Prime Minister Dr Keith Rowley admitted that the country was still facing economic challenges.
Ramkhelawan said there’s a new structure to the economy with lower government revenues and a reduced Gross Domestic Product (GDP). With respect to the non-energy sector, the managing director of Bourse Securities said it was struggling. He said too many manufacturers were net users of foreign exchange with the exception being those in the beverage and snacks sub-sectors.
Ramkhelawan said for the economy to grow manufacturers need to move downstream of the energy sector. He noted that the only driver of the economy is the energy sector, which was supposed to grow by 6 per cent in 2018 and 2019 by 2.4 per cent according to the figures from the International Monetary Fund.
“We are better off in the energy sector in terms of gas,” said Ramkhelawan.“We are not out of the woods at all in terms of the non-energy sector because the non-energy sector really, is highly dependent on what happens in the energy sector - in terms of sales, in terms of distribution, in terms of services.”
Ramkhelawan also noted the significant decline in Government expenditure. He echoed the Prime Minister’s sentiments concerning the impact that reduced government spending has on the economy.
“If government revenues and government expenditure falls, it feeds right across the economy because government is a very significant spender in the economy,” he said.
Ramkhelawan added that “citizens are starting to come to grips” with the adjustments in the economy but their confidence remains low.
Ramkhelawan noted that there are two types of capital expenditure (cap ex), one that is infrastructural in nature and the other is revenue generating.
He said: “We are not seeing any kind of cap ex really, that is directly focused on the generation of revenue.”