Central Bank concerned about unemployment, increasing prices

The content originally appeared on: Trinidad and Tobago Newsday

FILE PHOTO: Central Bank of TT. –

TRINIDAD and Tobago will, this year, participate in the world’s slight rebound from the covid19 pandemic – as now dampened by fallout from Russia’s invasion of the Ukraine – said the Central Bank’s Annual Economic Survey 2021.

“TT’s short-term outlook is expected to improve in 2022,” the report said.

With the reopening of the economy, growth is expected in TT’s energy and non-energy sectors.

However, the report had concerns about jobs and high prices, especially in the building sector and for foodstuffs.

“Despite improving domestic economic activity, labour market conditions may remain constrained until virus case-loads are effectively contained and vaccination rates increase among the working-age population. Within this context, low aggregate demand and spare capacity may attenuate (reduce) upward pressure on local prices.

“Even so, rising inflation and inflationary expectations from key source markets, and transitory supply chain disruptions for tradeable goods will add some upward impetus to prices.”

Bigger revenues for the government are expected to narrow the country’s fiscal deficit, the report said, but this could be tempered by any covid19-related public expenditure.

“The industrial relations climate is also anticipated to be more tense in 2022.”

Unemployment rose from 4.3 per cent in 2019 to 5.7 per cent in 2020, with 21,000 fewer people having jobs in 2020.

“Supplemental data suggest that labour market conditions remained relatively weak in 2021.”

The report said the UN Food and Agriculture Organisation reckoned world food prices were up by 28 per cent in 2021 relative to 2020.

“Notably, during the latter half of the year, several companies announced price hikes to combat rising import prices, including Kiss Baking Company Ltd and KC Confectionery Ltd.”

Higher freight prices and global shortages for raw materials drove up prices in the construction materials especially steel and lumber.

“Despite sluggish activity in the local construction sector, building material prices surged in 2021.

“The index of retail prices of building materials increased by 10.7 per cent in 2021 compared to 2.6 per cent in 2020. All sub-categories within the index increased during 2021.”

Notable increases were seen for the Walls and Roof (14 per cent); Plumbing and Plumbing Fixtures (12 per cent); Finishing, Joinery Units and Painting and External Works (8.7 per cent); and Electrical Installation and Fixtures (8.7 per cent) sub-indices.

“International prices for wire rods and billets rose 51.6 per cent and 58.0 per cent (year-on-year), respectively during 2021.”