Mary King disagrees with CB governor, says economy on "downward slope"

Economist and former Independent Senator Mary King disagrees with the assessment of the Trinidad and Tobago economy presented Tuesday by Central Bank Governor Ewart Williams.

The social activist said Wednesday the economy is on a downward slope despite Williams' statement that the economy is neither in recession nor has it reached "crisis proportions".

King referred to the UK-based Economics Intelligence Unit (EIU), noting that it is saying "that we’re on a downward slope and we could be heading into a very serious situation because our debt is rising, our gas price is falling and Government continues to spend wildly."

Williams told reporters Tuesday the economy continued to degenerate rapidly in the first six months of 2009 but insisted that there is no recession.

Read the story: No recession, but CB warns of hard times...

But King is not buying that. She said that Government has been cautioned for the past five years about the economy and that its spending should be structured and geared towards the building of new assets and the building of new sectors of the economy.

"What the Government has been doing is building the same role model, building the smelter. They are also putting money into steel. All of these things are certainly in a recession. The prices are down and there is no future outlook in the short-term that these things are going to turn up," King said.

The EIU, a member of the Economist Group, in its April 2009 report on Trinidad and Tobago, stated that a severe downturn in the economy and increasingly high levels of crime will plague the country for the next two years.

It also said, "Gross domestic product (GDP) growth, which slowed to 3.5 per cent in 2008, will weaken further in 2009 to 0.9 per cent as the global recession bites. A mild global economic recovery will help to lift GDP growth to 1.9 per cent in 2010."

The report also said:

• The already-low popularity of the prime minister, Patrick Manning, will be eroded further by the economic downturn and rising levels of violent crime
• Policy making will become more challenging in 2009-10 as the deterioration of the fiscal and current-account balances leaves Trinidad and Tobago exposed to global financial and economic woes
• Owing to the impact of the global recession, real GDP will contract by 0.5% in 2009, the first recession since 1993. A mild global economic recovery will help to lift GDP growth to a still-weak 1.2% in 2010

The federation of Independent Trade Unions (Fitun) believes the statistics which Williams quoted clearly suggest there is a recession in the country. FITUN President David Abdullah told the Trinidad Guardian, "The governor...did give enough information to confirm in our view that the economy is in a state of recession."

Abdullah said rising unemployment, food inflation and many other factors which Williams spoke of are indicators of an economy "in trouble" and blamed the Manning government for mismanaging the country's resources.