Despite Central Bank Governor Ewart Williams saying on Tuesday that while the T&T economy is neither in recession nor has it reached "crisis proportions," economist Mary King said the country's economic performance is on a downward slope.
"The Economics Intelligence Unit (EIU) is saying that we're on a downward slope and we could be heading into a very serious situation because our debt is rising, our gas price is falling and Government continues to spend wildly," King said yesterday. Her response was a reply to Williams' statements on Tuesday at a press conference the Central Bank hosted, at which he said the economy continued to degenerate rapidly in the first six months of 2009.
"I remain unconvinced that the current state of the economy would meet the accepted definition of recession," Williams said. King said that Government has been advised for the past five years about the economy and that its spending should be structured and geared towards the building of new assets and the building of new sectors of the economy. "What the Government has been doing is building the same role model, building the smelter. They are also putting money into steel. All of these things are certainly in a recession. The prices are down and there is no future outlook in the short-term that these things are going to turn up," King said.
The United Kingdom-based EIU, a member of the Economist Group, in its April 2009 country report on T&T, stated that a severe downturn in the economy and increasingly high levels of crime will plague T&T for the next two years. The report also stated: "Gross domestic product (GDP) growth, which slowed to 3.5 per cent in 2008, will weaken further in 2009 to 0.9 per cent as the global recession bites. A mild global economic recovery will help to lift GDP growth to 1.9 per cent in 2010."
The Federation of Independent Trade Unions
David Abdulah, president, Federation of Independent Trade Unions (Fitun), believes the statistics which Williams spoke of at Tuesday's press conference suggest there is a recession in T&T. "The governor, although he did not use the word recession, did give enough information to confirm in our view that the economy is in a state of recession," Abdulah said.
He said rising unemployment, food inflation and many other factors which Williams spoke of are indicators of an economy "in trouble." Abdulah said the major issue for Fitun is how the resources of T&T are used. "If Government had managed the resources wisely during the period of boom and continuing with its mega projects, we will not be doing anything to get us out of the difficulty and we're simply hoping for high oil and gas and other commodity prices," he said.
Chaguanas Chamber of Industry and Commerce
Stephen Cadiz, president of the Chaguanas Chamber, said given that T&T is an oil- and gas-based economy, once there is no activity in the oilfields, that is a definite sign that there is a problem. "There's been no new drilling activity or find of oil for nearly two years. That alone should tell you that somewhere down the road, you will run into problems. The signs have been there. When the world economy went into recession, T&T was saying it would never happen to us. We can't be singular, therefore, once that happens, Government should have put things in place immediately," said Cadiz