Doubts over growth in economy
UWI economist concerned after 2nd year of forecast errors:
As 2013 draws nearer to a close, one University of the West Indies (UWI) economist is raising a question about if the local economy will actually record 1.5 per cent growth by the end of the year.
At the launch of its Monetary Policy Report for November in Debe, on December 18, the Central Bank revised its overall economic growth projection for 2013 to 1.5 per cent, down from the 2.5 per cent it had maintained in May.
The Trinidad and Tobago economy grew 1.3 per cent in the first nine months of 2013, compared to 0.3 per cent for the same period last year, Central Bank data showed.
The bank has projected 2.5 per cent gross domestic product (GDP) growth in 2014.
But UWI, St Augustine, economics lecturer Dr Roger Hosein is concerned about this number.
In an emailed statement to Express enquiries, he said: “The Cen-
tral Bank downgraded its projection for 2013 from 2.5 per cent to 1.5 per cent and one wonders if even this can be maintained. This is the second straight year that the Central Bank has made this type of error in forecasting the national real economic growth rate.”
He noted: “The margins of error also seems to be widening, and one wonders if there is scope at some point to revisit the macroeconomic model used to forecast economic growth in the economy.
“Even more, and in forecasting its real GDP growth, the bank needs to take into consideration the fact, as illustrated in the table above, that there is an element of a slowdown in the world economy and, certainly, the pace of growth of the developed economy has fallen from almost consistently over the listed time period and may no longer carry the ‘engine-of-growth’ status that it once did.”
Hosein also projected an impact to the local economy, brought on by developments outside Trinidad and Tobago.
“The slowdown in the growth of the developed world would also affect tourism flows to our Caricom (Caribbean community) neighbours and these, in turn, are another major export market destination for goods from T&T.
“It is against this type of backdrop that a strategy of efficient internal demand has great merit and perhaps Government would want to pay more dedicated attention to its growth-pole exercises,” he stated.