CaribWorldNews, LONDON, England, Fri. Mar. 19, 2010: Significant capacity constraints and a sharply deteriorating outlook for the vital energy sector suggest to us that the twin-island nation`s economic recovery will be a weak and drawn-out process over the course of 2010.
That`s according to the latest report from Companies and Markets.com. The report`s authors said it is projecting only a moderate 2.4 percent real GDP growth recovery this year.
The report`s analysts said T&T remains in a deflationary territory, having experienced three consecutive months of negative month-on-month retail price growth in the third quarter of 2009.
The third quarter saw the twin-island economy post negative year-on-year real GDP growth for the fourth successive quarter, with the contraction of 5.6 percent y-o-y marking a deterioration on the -3.0 percent and -4.7 percent growth figures posted in Q209 and Q109 respectively.
`We are penciling in just 150 basis points of rate hikes this year to 6.50 percent, having seen a total of 375 bps since April 2009,` stated the report.
Meanwhile, focusing on the drought-like situation, the report`s authors said they expect the gastronomy sector to be particularly hard hit, especially if the water crisis results in several restaurants and vendors having to stay closed during the highly anticipated carnival season.