What recession? T&T gov't says economy has just "slowed"

The Trinidad and Tobago government is dismissing economic data that suggests that the country is in a recession. But Finance Minister Karen Nunez Tesheira admits that the economy has slowed.

The Central Bank governor has also avoided the "R" word, referring to the decline in economic activity as "stagnation" not "recession."

Most economists and financial experts define a recession as a significant decline in activity across an economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade.

They say the technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).

By this definition and in considering what the official central bank statistics show, Trinidad and Tobago can be said to be in a recession.

That's how opposition leader Basdeo Panday classified it last week in response to the prime minister's advice to citizens to start loosening their belts after a period of restraint.

But the government disagrees. According to Tesheira, “What we are saying, and there is no question about it, that there is a slow down...we are simply saying that (a recession) has not happened.”

The bank's Summary of Economic Indicators posted on its website on July 23 shows that the country has not only experienced two successive quarters of negative economic growth in its real GDP but declined across several sectors.

According to the official data economic growth fell by more than four per cent in the period October 2008 to March 2009. The first quarter of 2009 showed a 3.3 per cent decline in real GDP while the last quarter of 2008 showed a 1.1 per cent drop.

Related: Central Bank stats confirm T&T in recession

But the minister said the figures are not enough to indicate a recession. She admitted that the country will see a significant rise in unemployment, business closures and a drop in real incomes but insists that all that really shows is a "slowdown".