Williams: Economic planning difficult
Thursday, July 12 2012
OUTGOING Central Bank Governor Ewart Williams said economic policy making is difficult because of the lack of up to date statistics on the economy.
Williams made this point during an interview at his office at the Eric Williams Financial Complex last Friday as he expressed his hope that his successor would strive to continue his efforts to achieve better coordination between monetary and fiscal policy.
“The Central Bank should be able to count on with some certainty on the liquidity position as it comes from government expenditures and revenues. When I was here in 1988-1989, there used to be monthly liquidity forecasts,” he stated. Williams explained this would help the Bank to know “ the amount of liquidity absorption that was needed.”
“Therefore we would have a better feel for the extent of open market operations that in turn would impact on the process of interest rate determination. somewhere along the line that lapsed,” Williams said.
He stressed the need for a significant improvement in the availability of statistics. “It is getting worse rather than better. as of now, the last trade data that I have seen is July 2011,” Williams stated. He observed that even in the Organisation of Eastern Caribbean States (OECS), “you have trade data on a quarterly basis.” “We have trade data with a significant lag. I’m not blaming the Central Statistical Office (CSO). I think the issue is a lot more fundamental,” Williams added. On the positive side, Williams said he was pleased to know that the Planning Ministry “is now giving greater focus to upgrading the CSO, resourcing and staffing the place better and giving them some legislative autonomy.”
Williams also said the lack of availability of current economic data, “is making economic policy- making so much more difficult.”
“You would have seen in the last few IMF (International Monetary Fund) reports, they all point to the fact that there is an urgent need to upgrade the quantum and quality of available statistics,” he said.
Williams said he was not sure whether the real unemployment figure in the country is 5.6 percent. “I am not saying that anybody is manipulating the data,” he pointed out. Williams said just as there appears to be “upward bias in our food price inflation,” there is “downward bias in our unemployment data. “I think there is a bias in the data that we should re-examine.”