Economist: Control non-energy deficit

In its 2005 economic survey which was released earlier this year, the Central Bank said while the economy remains in good health and is expected to register further growth in 2006, lingering inflationary pressures and a widening non-energy deficit remained causes for concern.

In the survey, the bank said the non-energy deficit had widened from 7.9 to 9.7 percent of the gross domestic product (GDP).

Speaking with Newsday following the launch of the 2006 Excellence in Business Awards at Republic Bank’s Park Street offices in Port-of-Spain yesterday, Ramkissoon said TT’s non-energy deficit was “rising at too rapid a rate” and it must be addressed now before it reaches levels which are uncomfortable for the economy.

He said one strategy to reduce that deficit is to spread out some of the major infrastructural projects being undertaken by the Government over time instead of rushing to do all at the same time.

“The reality is that we want to seek to do too much all at the same time (which) is going to be counter-productive as it’s turning out to be,” Ramkissoon said.

He also said the survey and the Central Bank increasing the repo rate from seven to 7.25 percent, show that more needs to be done to deal with inflation and there needs to be an analysis of how measures being implemented to control inflation have been working.

Ramkissoon said Government has been successful in some of its economic diversification strategies, such as the industrial parks in places like Wallerfield, but needs to accelerate the pace of strengthening the non-energy sector while it has the foreign exchange reserves to do so.