Trinidad economy under inflation watch
by Stephen Cummings
Caribbean Net News Trinidad Correspondent
Email: stephen@caribbeannetnews.com
Wednesday, December 28, 2005
PORT OF SPAIN, Trinidad: The Trinidad and Tobago economy is now under close watch by economists and financial experts both locally an abroad who, in the past two months, have recorded increased levels of inflation, which are having some impact on direct and indirect investment and personal spending.
The latest data released by the Trinidad Central Statistical Office indicate that inflation, measured by the index of retail prices rose to 7.03 percent in November 2005 up from 6.94 per cent in October 2005.
This means that there has been a decline in the purchasing power of the TT dollar because of a high level of currency circulation within the economy.
The development has now caused the Trinidad Central Bank to institute measures to reduce excess liquidity in the financial market and so arrest inflation. The bank in a statement said it will also maintain its "Repo Rate" (the process by which it engages in borrowing money and the selling of government securities to investors) at 6.0 percent. This, it adds, is to help cushion any financial fallout.
In November alone, economists also recorded a 3.3 percent increase in food prices, the second highest monthly increase for the year so far. Food prices rose by 22.6 per cent in the twelve months leading up to November 2005.
Increased public sector spending, is said to be a major contributor to the current inflationary environment.
Central Bank officials say they will maintain the 'Repo' rate at its current level of 6.0 per cent and will continue to keep monetary conditions under close review. The next 'Repo' rate announcement is scheduled for January 20, 2006.
Early in December members of the Executive Board of the International Monetary Fund (IMF) in their latest report on Trinidad and Tobago's economy warned against unwise spending and wastage of the country's resources.
The IMF reported that "surging oil prices have strengthened the external current account balance of the Trinidad economy and there were tentative signs that the country was producing at, or near, capacity and inflationary pressures were emerging".
The financial experts warned that if the Trinidad government did not implement measures to reduce high public sector spending the economy could fall victim to what they termed a "boom-bust" pattern of economic growth.
Copyright © 2003-2005 Caribbean Net News
by Stephen Cummings
Caribbean Net News Trinidad Correspondent
Email: stephen@caribbeannetnews.com
Wednesday, December 28, 2005
PORT OF SPAIN, Trinidad: The Trinidad and Tobago economy is now under close watch by economists and financial experts both locally an abroad who, in the past two months, have recorded increased levels of inflation, which are having some impact on direct and indirect investment and personal spending.
The latest data released by the Trinidad Central Statistical Office indicate that inflation, measured by the index of retail prices rose to 7.03 percent in November 2005 up from 6.94 per cent in October 2005.
This means that there has been a decline in the purchasing power of the TT dollar because of a high level of currency circulation within the economy.
The development has now caused the Trinidad Central Bank to institute measures to reduce excess liquidity in the financial market and so arrest inflation. The bank in a statement said it will also maintain its "Repo Rate" (the process by which it engages in borrowing money and the selling of government securities to investors) at 6.0 percent. This, it adds, is to help cushion any financial fallout.
In November alone, economists also recorded a 3.3 percent increase in food prices, the second highest monthly increase for the year so far. Food prices rose by 22.6 per cent in the twelve months leading up to November 2005.
Increased public sector spending, is said to be a major contributor to the current inflationary environment.
Central Bank officials say they will maintain the 'Repo' rate at its current level of 6.0 per cent and will continue to keep monetary conditions under close review. The next 'Repo' rate announcement is scheduled for January 20, 2006.
Early in December members of the Executive Board of the International Monetary Fund (IMF) in their latest report on Trinidad and Tobago's economy warned against unwise spending and wastage of the country's resources.
The IMF reported that "surging oil prices have strengthened the external current account balance of the Trinidad economy and there were tentative signs that the country was producing at, or near, capacity and inflationary pressures were emerging".
The financial experts warned that if the Trinidad government did not implement measures to reduce high public sector spending the economy could fall victim to what they termed a "boom-bust" pattern of economic growth.
Copyright © 2003-2005 Caribbean Net News
