GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

Econ­o­mist Dr Mar­lene Attzs said yes­ter­day that she is cau­tious­ly op­ti­mistic at the lat­est fore­cast by the In­ter­na­tion­al Mon­e­tary Fund (IMF) for T&T.

In an in­ter­view with Guardian Me­dia yes­ter­day, Attzs not­ed that the IMF sug­gest­ed that re­al GDP growth will ac­cel­er­ate from 1.6 per cent in 2024 to 2.4 per cent in 2025.

She said that this pro­ject­ed growth, while mod­er­ate, may be in­ter­pret­ed as a po­ten­tial re­cov­ery or sta­bil­i­sa­tion af­ter the chal­lenges this coun­try faced in re­cent years,

par­tic­u­lar­ly giv­en the glob­al slow­down in en­er­gy de­mand, the COVID-19 pan­dem­ic and oth­er ex­ter­nal shocks to which T&T was vul­ner­a­ble.

"The con­sumer price in­fla­tion pro­jec­tions sug­gest­ing 1.3 per cent in­fla­tion rate in 2024 and 1.9 per cent in 2025 al­so in­di­cate that in­fla­tion is ex­pect­ed to re­main rel­a­tive­ly low and sta­ble, which one may in­ter­pret to be some de­gree of con­trol over do­mes­tic price pres­sures, mean­ing that do­mes­tic prices have not been in­creas­ing but rather have been more or less sta­bil­is­ing.

"But notwith­stand­ing what the da­ta may show in terms of these rel­a­tive­ly low in­fla­tion rates, this is not the re­al­i­ty of many of the pop­u­la­tion as peo­ple con­tin­ue to grap­ple with high­er prices all around, par­tic­u­lar­ly in re­la­tion to food prices," Attzs ex­plained.

She fur­ther not­ed that there is al­so some pos­i­tiv­i­ty com­ing out of the IMF in terms of the coun­try's cur­rent ac­count bal­ance, which the or­gan­i­sa­tion is pro­ject­ing to be at 5.5 per cent in 2024, in­creas­ing to 7.2 per cent in 2025. That, for all in­tents and pur­pos­es, re­flects a healthy sur­plus on T&T's in­ter­na­tion­al trans­ac­tions with the rest of the world.

How­ev­er, Attzs warned giv­en that this coun­try is a ma­jor ex­porter of oil, nat­ur­al gas and petro­chem­i­cals and pro­duc­tion from the en­er­gy sec­tor has been in de­cline, adding that this sur­plus may be al­lud­ing to non-en­er­gy ex­ports.

Com­ment­ing fur­ther on the IMF's re­port, the de­vel­op­ment econ­o­mist said, "Over­all, the IMF gave the coun­try a pos­i­tive, al­beit a mod­er­ate out­look, with sta­ble growth and in­fla­tion along­side a healthy cur­rent ac­count bal­ance."

How­ev­er, she again main­tained that these pro­jec­tions still re­flect the coun­try's heavy de­pen­dence on the volatile en­er­gy sec­tor and di­ver­si­fi­ca­tion of the econ­o­my re­mains crit­i­cal to mit­i­gate risks that may arise from fluc­tu­at­ing en­er­gy prices to en­sure long-term sus­tain­able growth.

Ad­di­tion­al­ly, Attzs said the pro­ject­ed growth rates may not be suf­fi­cient to ad­dress some of the coun­try's struc­tur­al chal­lenges, in­clud­ing things like high un­em­ploy­ment and un­der­in­vest­ment in non-en­er­gy sec­tors.

"We al­so need to be mind­ful that any, and I mean any, sig­nif­i­cant event in the glob­al eco­nom­ic space could im­pact en­er­gy de­mand and, in turn, neg­a­tive­ly im­pact T&T's growth prospects.

"So we need to look at mov­ing away from our heavy re­liance on the en­er­gy sec­tor, even as we ac­cept that en­er­gy will con­tin­ue to be a sig­nif­i­cant part of T&T's eco­nom­ic pro­file for the fore­see­able fu­ture. We need to make con­cert­ed ef­forts to move away from that over-re­liance on the en­er­gy sec­tor and pro­mote growth in oth­er sec­tors while main­tain­ing a sus­tain­able fis­cal frame­work, ra­tio­nal­is­ing trans­fers and sub­si­dies so that we can move to a space where we can im­prove T&T's re­silience to glob­al shocks and en­sure long-term growth and sus­tain­able de­vel­op­ment for the peo­ple of T&T," she stressed.

Al­so com­ment­ing econ­o­mist Dr Vaalmik­ki Ar­joon agreed that while it is en­cour­ag­ing the coun­try is ex­pe­ri­enc­ing pos­i­tive growth since 2022, this is af­ter an ex­treme­ly weak per­for­mance be­cause of the pan­dem­ic.

"And af­ter you hit rock bot­tom there is on­ly one place to go, that's up. So it will re­al­ly be more in­tu­itive for us to com­pare our­selves to where we were in the im­me­di­ate pre-pan­dem­ic pe­ri­od and this will show that we are still 6.1 per cent low­er than where we were at 2019. So, we still have a lot of catch­ing up to do and the way to do this is to re­move the ob­sta­cles in the way of do­ing busi­ness as much as pos­si­ble," he ad­vised.