(Trinidad Guardian) – A day after Central Bank governor Ewart Williams said T&T is not in a recession, an economist with the University of the West Indies (UWI) has contradicted him and said T&T and the rest of the Caribbean are in a recession.
Making the claim is Dr Carlisle Pemberton, head, Agricultural Economics Department, UWI, St Augustine Pemberton, responding to Tuesday’s article in the Guardian, in which Williams said: “In the recession that the United States is talking about, unemployment moved from 5 to 9 per cent.
We are not facing that. We have clearly faced a deep slowdown. And, we have some positive signs like the increase in the oil prices.” Williams’s statements were made on Monday at the presentation of the De La Rue scholarship to Kester Thompson. Pemberton differed with Williams on whether the T&T economy is in a recession. “Many economists define a recession as at least three consecutive financial quarters with negative growth.
So far, we do not have access to the statistics to confirm whether we are in a recession, but you can see the effects through lower employment, growing inflation and reduced consumer confidence. We are seeing all of those effects right now, even though the recovery in oil prices has made it easier for this country to cope than many of our neighbours. The economist said with a drop from US$149 to US$30 a barrel in just a few weeks last year, the T&T economy has definitely seen a contraction since last July. He said that despite an oil price recovery to less than US$60 a barrel since then, the contraction will continue and will have an impact on T&T’s non-oil sector. “The drop in oil prices has led to reduced local demand for goods and services. This, together with higher international demand for food items such as corn for alternative energy and ethanol production, has led to scarcity and higher prices on basic food items.
“As long as the economy is growing, and the value if its output is increasing rather than staying at zero or showing negative growth, we do not define it as a recession. “In the other Caribbean islands, the global recession has depressed the tourism sector, thus, keeping foreign currency earnings low. This has eroded the government’s ability to fund developmental and social safety net programmes—further intensifying the problem.
He said China is the only major economy that is not in a recession, but even so it is still growing at a much lower rate, as its production is being fuelled by booming internal demand for goods and services. “As head of the Central Bank, Governor Ewart Williams may have access to resources and preliminary statistics that have not yet been released, and he may be in a position to evaluate the economy and see trends we may not be able to review,” he said.
“Maybe he was be looking at the recovery of the price of oil from US$30 to US$60 in the final quarter of 2008 and early 2009 as providing the impetus for the changes he is forecasting. “Even though you can use preliminary data to get an idea of what the future holds, it takes some time to compile the data as well as review and confirm the trends long after the preliminary figures are released.
