Port-of-Spain: The Central Bank has released a monetary report forecasting that Trinidad and Tobago will not recover from recent economic woes in the year 2011.
The report shows growth of just 0.6% in 2010, but the Central Bank Governor Ewart Williams says there are no signs that the economy would achieve the predicted growth of between 2% and 3% this year.
The government had predicted a Budget Deficit of $7 billion dollars last year hoping that expenditure would stimulate the economy, but the Central Bank says the deficit only amounted to $300 million.
The Bank says reduced deficit had nothing to do with increased revenue but rather it was a result of the new government not being able to begin new projects as quickly as had hoped.
Governor Williams says the business sector was also unable to stimulate activity because commercial banks did not reduce rates enough to allow for more borrowing.
However, consumer credit from commercial banks increased and evidence showed that purchases of new cars increased 18 percent increase.
The Bank says it does not have data on unemployement beyond the second quarter of 2010 but notes that there was increased employment around the general election in May 2010. It says there is evidence to show that after that, unemployment may have increased to about 6% by the end of the year.
However the Bank notes that advertisements for jobs in the daily newspapers have increased 80% in 2011 giving hope that the unemployement rate is dropping.
The Bank says it does not see the economy kickstarting without the credit facility to the business sector expanding this year and already the budget deficit is also expected to be around $300 million in 2011.
Without these two key factors among many others, the Bank now believes growth for 2011 would be between 1% and 2%.
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