Ravi Suryadevara, president of the American Chamber of T&T (AmChamTT) expects urgent action from whoever wins the September 7 general election to steady the T&T economy against external shocks from volatiity in international markets, including falling oil prices.
"Whoever wins the next election does not have the luxury of settling in. It cannot be politics as usual and the next government needs to prioritize and look at how they utilize income earnings," he said, in reaction to plummeting stock markets in the United States and Asia and further declines in the price of oil.
Suryadevara told the T&T Guardian: "Now that energy prices are low, it is the ideal time to re-peg and re-calibrate the fuel subsidy that costs the state a lot of money. Other energy producing countries like Nigeria and the UAE have done it, so can we. The Government now have a golden opportunity to look at this."
Based on the macro economic conditions of the country, he said, the situation was not yet "calamitous" for T&T.
"The country does have staying power. We have been calling for a balanced budget for years and we are confident that whoever forms the next government will be able to achieve this. As a country our habits as a country need to change and so to must our expectations." he said.
The US stock market took investors on a stomach-churning ride yesterday, as the Dow Jones industrial average briefly plunged more than 1,000 points and sent a shiver of fear from Wall Street to Main Street.
Stocks regained much of that ground as the day wore on. But the slump–part of a global wave of selling triggered by the slowdown in China–reflected uncertainty among investors over where to put their money when the world's second-largest economy is in a slide.
The Standard & Poor's 500 index also fell sharply shortly after the opening bell, entering "correction" territory–Wall Street jargon for a drop of 10 per cent or more from a recent peak. The last market correction was nearly four years ago.
US treasury securities surged as investors bought less risky assets. Oil prices fell. But investors also saw opportunity, moving fast and early to snap up some bargains. That helped trim some of the market's earlier losses.
The Dow was down 564 points, or 3.4 per cent, at 15,895 points about an hour before closing bell. The S&P 500 was down 73 points, or 3.7 per cent, at 1,897. The Nasdaq composite had shed 162 points, or 3.5 per cent, at 4,543 points. The three indexes are down for the year.
Heightened concern about a slowdown in China had already shaken markets around the world on Friday, driving the US stock market sharply lower. The rout continued yesterday as China's main stock index sank 8.5 percent.
Oil prices, commodities and the currencies of many developing countries also tumbled Monday on concerns that a sharp slowdown in China might hurt economic growth around the globe.
West Texas Intermediate crude, which trades slightly about the crudes produced in T&T, dropped US$1.41, or 3.5 per cent, to US$39.03 a barrel in New York. This is blow of US$45 a barrel price on which the national budget is pegged.
Commenting on the price of oil, Suryadevara said the market will eventually work itself out but it is left to be seen when prices will rebound.
"It is not now we at AmCham are concerned. We have been concerned for a while now but it is only now, these things are manifesting themselves. The supply and demand of the market will play itself out. Iran oil is back on the market, China's consumption is falling and US shale production is seemingly resilient. How long this will go on for, no one knows," he said.
