Central Bank Governor assures: Inflation under control

Inflation is under control, according to Central Bank Governor, Ewart Williams, who spoke to reporters yesterday after addressing a breakfast seminar on the amendments to the Insurance Industry Act 1980. Although he admitted that inflation was still an issue of concern and could show a small increase in the first quarter of 2004, Williams explained that it was not out of control and that the bank was committed to holding it at four percent. “It is no secret that there was some adjustment in some prices of essential commodities and consumer materials,” he said adding, “I wouldn’t be surprised if there is a small rise in inflation in the first quarter but I don’t anticipate that it will be a major rise.

“An increase in the price of chicken does not mean a catastrophic rise in inflation.” Information data for the first quarter of the year should be released by Friday, he revealed. “We have been working with the Central Statistical Office to ensure that inflation data is available with at least a one month lag,” Williams noted. “As of now, the lag extends to as many as three or four months which is totally unacceptable.” Responding to questions about the significant increase in oil prices on the global market and the expected impact on the local economy, Williams explained that while Government could expect to see an increase in revenue, this was highly dependent on the tax regime.

He said, “an increase in oil prices does not automatically translate into higher revenues because of the tax regime where companies are able to write off capital expenditures, but other things being equal, it means more revenue for the government.” “Government has said that it is going to maintain its expenditure policies in line with what was envisaged in the budget, therefore I don’t think that increased revenues will automatically be translated into higher government expenditure,” he added.