Senator concerned about increase in food prices

INDEPENDENT Senator Amrita Deonarine has called for a review of the country's inflation rate as it does not reflect the inflated food prices citizens face.

She was contributing to debate on The Finance (Supplementary Appropriation) (Financial Year 2020) Bill in the Senate on Monday.

She noted Government's financial support initiatives during the covid19 pandemic including 100,000 in receipt of food support and more than 50,000 have received the salary relief grant. But she said the purchasing power from these grants "is quickly withered away" when people went to groceries. Deonarine said that there has been a hike in food prices since the onset of the covid19 crisis, despite efforts from the Trade Ministry, and even prior to the pandemic.

She said the Central Bank’s website stated in February that year-on-year headline inflation was 0.5 per cent which was almost no inflation.

"I am wondering how much value for money the recipients of these grants are receiving. Perhaps it is the bare minimum and they may not be able to afford much."

Deonarine said something was clearly wrong with the inflation rate as it did not reflect current consumption patterns. She asked Minister in the Finance Ministry Allyson West to speak with the Central Statistical Office about it.

She also said the minister did not report on how many people had lost their jobs, and this type of critical information was necessary as a baseline to inform policy decisions.

On the projected economic contraction of 2.4 per cent and growth of 4.7 per cent in 2021, Deonarine said she needed clarity on the figures given the global climate and performance of the energy sector.

"I am not convinced the contraction will be so small."

On the financial assistance for businesses during the covid19 pandemic she said that she understood the logic in assisting medium-sized enterprises as these have higher levels of employment. But she advised that more grants should be directed to the micro and small entrepreneurs whose annual sales revenue was less than $1 million.

"These have a lower level of resilience and are the most susceptible to being completely wiped out of existence."