Prime Minister Patrick Manning’s Recession Plan
The prime minister has put forward a three-pronged approach to deal with the economic situation. The government plans to continue trimming expenditure, run a temporary deficit and raise the money to finance this deficit by floating bonds on the domestic market.
It is a good thing that the government acknowledges the falling energy prices and has made adjustment to the budget to suite. Manning stated that the budget will be adjusted from $55 a barrel on oil prices to $45 and the gas price was also being revised downward to US$3.25 per million British thermal units (mmbtu) for gas. The original budgeted price was US$4 per mmbtu.
Although no one could accurately predict the future, some would agree that the adjustments made are appropriate at this time, while other feel that the energy prices will fall well below that which has been estimated for the budget. The later, therefore, believes that the deficit that government predicts ($1.7 billion) would definitely increase.
The argument has also been made that the cut in expenditure will have a negative effect on the economy. However, there is a silver lining, we are in a better position to weather the financial and economic crisis than most of the Caribbean countries and we are better off than in the previous crisis of the 1980s. We also are beginning to see a decrease in inflation, and it is estimated that by the end of the year the percentage of inflation maybe decreased to approximately half (7-8 per cent) of what it is now (15.4).
Another announcement that was made, that the public could take solace in, is that the government has no “immediate” plans to cut back on wages and salaries, pensions, senior citizens’ grants, disability grants, other social programs and programs to deal with crime.
But I’m afraid I have to end on a disappointing note, unemployment rates are expected to increase by the year’s end. This prediction was made despite Manning’s assurance that the unemployment rates will not increase. We would be foolish to believe Mr. Manning when we can already witness everyday people already being laid off from their jobs.
Tags: Patrick Manning, Recession, Trinidad Recession2 Responses for “Prime Minister Patrick Manning’s Recession Plan”
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Thank God the PM recognizes that we are facing difficult, hope it not too late to make changes
last time i check oil prices it was less than $45. the question is, was the adjustment sufficient or realistic?