Instead of depending on an international index to determine the economic climate in Trinidad and Tobago, the business community will be able to soon resort to the Central Bank’s Business Confidence Index.
The index, data for which is now being collected via survey, was launched yesterday at the Hyatt Regency (Trinidad), Port of Spain, and is administered in conjunction with the Arthur Lok Jack Graduate School of Business (GSB).
GSB also conducts surveys necessary for the annual World Economic Forum Global Competitiveness Index.
Central Bank Governor Jwala Rambarran said this index will be different from other international indices because it will comprise the views of the business community on the macroeconomic situation of the country as well as any constraints they see to business activity.
The Central Bank will then use this information to craft its monetary policy and the decisions the bank makes around financial stability.
“It will also help the Government because it gives them a timely pulse check on the views of the business community and what they would like to see in terms of the national budget and what Government should implement in terms of its policy initiative. And then it helps the business community because as a group they are now seeing what their peers are thinking,” Rambarran said.
Around 200-250 business people from a range of industries that contribute to at least 75 per cent the country’s gross domestic product will be surveyed. Results will be released at quarterly intervals. The first Index is expected in March.
The Index covers several important features of a firm’s financial operations, including financial performance and outlook, production and investment outlooks, employment, business constraints, and local and global outlook.
The bank also plans to next year launch two more surveys: a Consumer Index and a Labour Market Index.
“Once these are completed we will have this suite of confidence surveys around the entire economy. These will be called the forward looking indicators that will give us a sense of what is likely to happen (in the context of) historical data,” Rambarran said.