Panday calls Manning irresponsible for urging citizens to spend

Opposition leader Basdeo Panday has described as "irresponsible" Prime Minister Patrick Manning’s advice for citizens to loosen their spending, saying recent economic data shows that Trinidad and Tobago is in a recession and inflation will start climbing again soon.

He was referring to statements Manning made Tuesday during an address to a gathering of business people Tuesday, in which Manning advised that after months of economic restraint, it's time to relax.

"I would like to suggest to you that whereas we had called on you to tighten your belts at the first sight of the downturn in the United States, I must now say the time has come for you to release your belts."

Manning said it is time to increase economic activity, noting that the country's Heritage and Stabilisation Fund has reached US$2.9 billion and continues to grow.

“Whereas so many countries around the world are experiencing a shortage of cash, we have a surplus of cash that is now available to utilise as we seek to increase the level of economic activity,” he said.

He revealed that he has asked a cabinet team to devise a plan to stimulate economic activity. He said the 2010 budget would show greater economic, declaring that he is an optimist who is "very excited about the future" of the country.

But Panday doesn't share Manning's view of the economic situation.

"Economic data released by the Central Bank during the last week show two consecutive financial quarters of negative growth in 2008 and 2009. That means the country has been in a recession for some time," Panday said.

He said it is the view of economists that the second Quarter of 2009 would also show negative growth based on all economic indices and trends.

He added that the current third quarter is also not looking good partly because of "the contraction in the manufacturing sector, reduction in demand caused by our CARICOM neighbours tightening their own belts and increased unemployment due to lack of business confidence and pressure on the foreign exchange system."

The former prime minister also noted that while the inflation rate has gone down, food inflation remains high at more than 16 per cent.

It is therefore foolhardy advice from the Prime Minister, he said, for people to spend away the little they may have while the country is tossing around in a recession and as things get increasingly worse every day.

“I don’t think the population should pattern the irresponsible, reckless and wasteful habits of the Prime Minister of spending away every cent in sight when they should be saving and preparing for tough times,” Panday said.

He said even if people wish to loosen their belts, he doesn't think they can afford it. “The cost of living has been so high over the past few years that people have been up to their necks in meeting their financial commitments”.