No TT recession: Central Bank

The governor of the Central Bank of Trinidad and Tobago has said there bank has no economic indicators at the present time to suggest that the country is heading into a recession. And Ewart Williams says he expects the culture of Christmas spending to continue as usual.

“In fact, as of now, we are showing pretty healthy growth. And we would expect that even with the expenditure cuts that are envisaged, the economy is unlikely to be in recession," he told reporters.

“Clearly, with lower demand, with uncertainties in the international economy, we would expect a slowdown, but we certainly do not expect the catastrophic results that some people tend to expect,” he said.

Williams acknowledged that growth would be slower but he's not expecting a recession, which is defined as two successive quarters of negative growth.

The bank anticipates growth to continue at around 3.5 per cent and further decline in 2009. However Williams doesn't expected the economy to come to a halt.

And he said things actually look healthy. “We do not see significant reduction in employment as a result of the slow economic growth simply because the main driver of the slow growth in 2009 would come from the energy sector...(which) accounts for only three per cent to four per cent of total employment.”

But Williams is basing his optimism on oil prices remaining stable at around US$50 a barrel, which is what experts are predicting for 2009. He isn't offering any suggestions on what might happen if it falls well below that.

The Central Bank’s chief said his priority now is to fight inflation, which was 15.4 per cent in October. He said that's the most worrying problem today.

Williams said it important to bring inflation down to single digits as soon as possible. “Therefore, certainly from the Central Bank’s viewpoint, the main risk is fighting inflation, because at 15.4 per cent, that is the risk,” he said, adding that people's food bills contribute significantly to inflation.