Wednesday 21st May, 2008

 

Economist magazine: T&T inflation to stay 10 %

 
 
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Bronwen Brown, left, with Anna Szterenfeld, both of the Economist’s Intelligence Unit, at a media conference at the Hyatt Regency Trinidad hotel, 1 Dock Road, Port-of-Spain, yesterday.
Photo: Keith Matthews

BY ASHA JAVEED

Expect inflation to remain at 10 per cent for the rest of 2008 and drop to about 8.3 per cent in 2009.

That’s the forecast from Bronwen Brown of the Economic Intelligence Unit of the Economist magazine.

She said that all indicators showed that T&T was in a good position and inflation was the key issue facing the country.

She said that Government’s massive infrastructural projects were fuelling the inflation but that high global food prices were also a contributor.

Inflation, she said, was being fuelled by both internal and external factors which added to demand pressures.

Brown said that by next year inflation should drop as food production increases to level off the high prices.

She was speaking at a media conference hosted by Economist Conferences, a department of the well known magazine, at the Hyatt Regency Hotel yesterday in advance of a business roundtable with the Government which officially opened yesterday.

The roundtable, which will be held behind closed doors, would involve Government ministers Lenny Saith, Conrad Enill, Joseph Ross, Karen Tesheira-Nunez and Kennedy Swaratsingh and more than 150-plus delegates. It ends today.

Brown said that the Economist’s forecast for natural gas and oil growth was 16 per cent and 45 per cent respectively for 2008 which should augur well for the energy economy.

As to whether the country’s high crime rate was affecting investment, Brown said that members of the energy sector, which was where most invesment was taking place, were not in contact with a lot of crime. She pointed out that it has impacteed on domestic businesses as the cost of security has increased.

Brown said that T&T’s gas subisdy which was about $2 billion last year was amazingly low in the Caribbean and by extension the rest of the world.

“At some point, T&T will have to bite the bullet,” she concluded.

She said that it was costing the Government a lot to subsidise the price of gas but that a decision to remove the subsidy would not be popular.

She forecast that the subsidy would remain in the medium term but that it needed to change.

Energy Minister Conrad Enill has already admitted that the subsidy is not properly targeted.

He said that Government may have to make special arrangements to ensure that the benefits of the subsidy reach the people it was intended to help.