Inflation, unemployment on the rise... energy output down

Headline inflation jumped to 3.1 percent year-on-year in August from 2.9 percent in July, driven primarily by an increase in food inflation, up by 0.4 percent to 7.2 percent in August from 6.8 percent the previous month.

Core inflation, which excludes food, went up to 2.2 percent from 2.0 percent.

Unemployment figures for the first quarter of 2016 – the most recent available – was 3.8 percent, up from 3.5 percent in the last quarter of 2015. “Provisional information for the first seven months of 2016 showed that domestic activity remained subdued,” the Central Bank said in a statement yesterday. For the period January to July 2016, the CBTT noted that crude oil and natural gas output fell just over 10 percent, partly due to continued maintenance and upgrade programmes of major energy companies.

The CBTT also noted that in the context of muted aggregate demand, price pressures were moderate, reflecting to some extent the impact of a 4.2 percent depreciation of the TT dollar versus the US dollar since the start of the year. Liquidity remained relatively steady in the third quarter with commercial banks’ excess reserves averaging around $3.2 billion daily, while sales of foreign exchange further removed $1 billion and open market operations, $1.2 billion. Against this backdrop the Central Bank said its Monetary Policy Committee decided to hold the Repo rate at 4.75 percent.