Trinidad and Tobago might soon be facing a recession

THE EDITOR: I hate to be the bearer of bad tidings, but Trinidad and Tobago might be facing a recession in 12 to 18 months. I kid you not.

The truth hurts, believe you me. Do not shoot the messenger, comprehend the message, TT. Work with me, people.

Consumer prices are high. The global health crisis continues to disrupt supply chains and Russia's invasion of Ukraine threatens to create a world food crisis.

The war has pushed gasoline prices to record levels, taking a big bite out of household budgets. The labour market is tight.

A recession is a significant decline in economic growth that can last months, even years.

During a recession a country's overall economic output declines, unemployment increases, retail sales fall, businesses cut their spending and manufacturers produce less goods.

If everyone believes a recession is coming, consumers and businesses will drastically decrease their spending, sending the economy into a tailspin.

The best way to prepare for a recession is not to retrench, but instead build resilience to protect your finances from an economic shock.

We can do that by ensuring a steady stream of income. Lock in a new job, ask for that raise now. Our unions are doing that.

If unemployment is low, a recession cannot change that.

Build up your cash cushion, TT. Have six months’ living expenses covered in case of any unexpected emergency.

We need to buy what we need, not what we want. Have some of your investments converted to cash. We can ride this out. TT, stay disciplined, do not let your emotions get the better of you.

A recession cannot last forever. Recessions are followed by periods of strong growth.

AV RAMPERSAD

Princes Town