GEISHA KOW­LESSAR-ALON­ZO

Ex­pect good things in 2023.

This from Cen­tral Bank Gov­er­nor Dr Alvin Hi­laire who shared some in­sights ex­clu­sive­ly with the Sun­day Busi­ness Guardian dur­ing the Bankers’ As­so­ci­a­tion of T&T’s (BATT) 25th an­niver­sary cel­e­bra­tion which was held at the Hilton Ho­tel re­cent­ly.

Ac­cord­ing to Hi­laire things have been look­ing up for this coun­try.

“We are work­ing on our pro­jec­tions now. So far, things look very pos­i­tive in a num­ber of ar­eas so we ex­pect good things in 2023. We are re­fin­ing our pro­jec­tions now. We just had the (In­ter­na­tion­al Mon­e­tary Fund) IMF here. We will have our Mon­e­tary Pol­i­cy an­nounce­ment at the end of De­cem­ber so we will be in a bet­ter po­si­tion in the next cou­ple of weeks to be more de­fin­i­tive,” Hi­laire said.

And even with the on­go­ing war in the Ukraine and its con­tin­ued glob­al reper­cus­sions Hi­laire is con­fi­dent this coun­try will re­main re­silient.

“Over the last IMF meet­ings there was a sense of gloom with re­spect to a num­ber of things; the high in­fla­tion,” he cit­ed for in­stance, adding that this cou­pled with the loom­ing cli­mate change and oth­er geopo­lit­i­cal is­sues have brought their own prob­lems.

“You have the Chi­na prop­er­ty mar­ket in prob­lems which the Chi­nese are try­ing to sort that out. So a num­ber of things have been lead­ing to some pes­simism and the growth out­look has been down­grad­ed by the IMF and many oth­ers and the in­fla­tion out­look has gone up,” Hi­laire fur­ther out­lined.

Ac­cord­ing to a Reuters’ re­port Chi­na’s new home prices fell at their fastest pace in over sev­en years in Oc­to­ber, weighed down by COVID-19 curbs and in­dus­try-wide prob­lems, re­flect­ing a deep­en­ing con­trac­tion that prompt­ed au­thor­i­ties to ramp up sup­port for the sec­tor in re­cent days.

It said Chi­na’s prop­er­ty sec­tor has strug­gled with de­faults and stalled projects since au­thor­i­ties start­ed to clamp down on ex­ces­sive lever­age in mid-2020, hit­ting mar­ket con­fi­dence and weigh­ing on eco­nom­ic ac­tiv­i­ty.

New home prices de­clined 0.3 per cent month-on-month af­ter eas­ing 0.2 per cent in Sep­tem­ber.

But for T&T go­ing for­ward Hi­laire said with “prop­er calm pol­i­cy and co­op­er­a­tion by all par­ties” T&T will be able to do well and start the road to re­cov­ery.

Ad­di­tion­al­ly, the fact that busi­ness­es have re­opened is al­so a good eco­nom­ic sign which sig­nals a sense of busi­ness con­fi­dence, he added.

“And one of the en­cour­ag­ing things we have seen is there’s a re­vival of busi­ness cred­it from the com­mer­cial banks to busi­ness­es and this has giv­en us a sense of more con­fi­dence,” Hi­laire added.

Re­gard­ing oil and gas pre­dic­tions Hi­laire who said he’s not an ex­pert in this field how­ev­er, not­ed Gov­ern­ment is work­ing on a num­ber of ini­tia­tives and once han­dled prop­er­ly then things should be fine for this coun­try.

In­fla­tion

In its Mon­e­tary Pol­i­cy An­nounce­ment in Sep­tem­ber 2022 the Cen­tral Bank not­ed that head­line in­fla­tion rose to 5.9 per cent (year-on-year) in Ju­ly 2022, up from 4.9 per cent in June.

The price ris­es were fair­ly broad-based, it not­ed.

Food in­fla­tion reached 10.3 per cent in Ju­ly while core in­fla­tion (which ex­cludes food items) mea­sured 4.9 per cent.

Ac­cord­ing to the Gov­er­nor, this year in­fla­tion “tipped over” six per cent in Au­gust, not­ing that the bank con­tin­ues to look at this.

He al­so not­ed that core in­fla­tion is “still fair­ly con­tained” but food in­fla­tion is over 11 per cent, and again re­it­er­at­ed the bank is al­so mon­i­tor­ing this.

In Au­gust the Cen­tral Sta­tis­ti­cal Of­fice (CSO) record­ed an in­crease in the food and non-al­co­holic bev­er­age in­dex.

It said ac­cord­ing to its In­dex of Re­tail Prices for Au­gust, the price of Food and Non-Al­co­holic Bev­er­ages in­creased from 135.8 in Ju­ly 2022 to 139.2 in Au­gust 2022, re­flect­ing an in­crease of 2.5 per cent.

Can we ex­pect more in­fla­tion in 2023?

“We do think we haven’t fin­ished the in­fla­tion­ary round this year so at the end of year we could have a lit­tle more in­fla­tion as we have the pass through from the en­er­gy price im­pact on the do­mes­tic fu­el prices.

“We don’t think that has passed through yet. We may have some oth­er ex­ter­nal price im­pacts do­mes­ti­cal­ly so in­fla­tion could nudge up to­wards the end of this year,” Hi­laire said.

Next year, he de­scribed as a “kind of a wild card” ex­plain­ing this “de­pends on what hap­pens in­ter­na­tion­al­ly and how we re­spond.”

“So we are not clear on that,” Hi­laire said, not­ing that cer­tain­ly, the glob­al out­look is for high­er in­fla­tion and ta­per­ing off the year af­ter.

“So we have to be very care­ful. The Cen­tral Bank will be look­ing at that very care­ful­ly along with oth­er in­di­ca­tors in craft­ing our mon­e­tary pol­i­cy,” Hi­laire added.

And on oth­er is­sues like whether Gov­ern­ment should de­val­ue its TT cur­ren­cy he said he does not think there is any new change to be ad­dressed now.

“I think things are steady; mov­ing in the right di­rec­tion so any rad­i­cal change would have to be very well thought out and con­sis­tent with oth­er poli­cies,” Hi­laire added.

And on gen­er­al ad­vise to Gov­ern­ment mov­ing for­ward the Cen­tral Bank Gov­er­nor re­it­er­at­ed there must be “calm and da­ta dri­ven” poli­cies which are con­sis­tent.

“In oth­er words, you have fis­cal pol­i­cy which has to do its job which is not very easy. Mon­e­tary pol­i­cy deal­ing with in­fla­tion and struc­tur­al pol­i­cy which is quite im­por­tant and we still have some work to do on im­prov­ing the ease of do­ing busi­ness and mak­ing things eas­i­er to hap­pen in T&T,” Hi­laire said.

He added there still ex­ists “a lot of red tape and bu­reau­cra­cy and so forth” which must be worked on to im­prove this coun­try’s com­pet­i­tive­ness.

The busi­ness­es com­mu­ni­ty has al­so re­peat­ed­ly echoed sim­i­lar sen­ti­ments over the years.

Ad­di­tion­al­ly, Hi­laire said the pri­vate sec­tor al­so has a role to play in T&T’s de­vel­op­ment and even the man in the street who has a job to do as well as the Cen­tral Bank and oth­er stake­hold­ers.

“So, let’s pull to­geth­er. The stakes are high. We could make it hap­pen,” Hi­laire added.