Economic Bulletin: Unemployment declined, inflation on the rise

WHILE inflation increased by 1.1 per cent in the first quarter of 2022, unemployment went down by 1.4 per cent, according to the Economic Bulletin shared by Central Bank on Friday.

Citing statistics from the Central Statistical Office, Central Bank said headline inflation went up to 4.9 per cent year-on-year in June, as compared to 3.8 per cent in January. It said food inflation also accelerated during the same period to 7.8 per cent, up from 6.6 per cent in January.

But the unemployment rate declined to 5.1 per cent in June, down from 6.5 per cent in January.

Real GDP in the energy sector declined 5.1 per cent year-on-year in the first quarter, but the non-energy sector had an uptick by 2.2 per cent. But it said while there was a dip in the energy sector, there were noticeable signs of recovery for the sector.

“Local energy production is poised to benefit from the start-up of several upstream projects from bpTT, Shell TT EOG Resources Trinidad and Touchstone exploration,” the bulletin said. “Additional impetus should come from higher commodity prices and increased demand for energy-related products.”

The report added that the non-energy sector already on the upswing, should expect to benefit from heightened business activity and consumer demand.

Despite an increase in overall expenditure higher revenues during the first nine months of the financial year, from October 2021 to June 2022, contributed a $3 billion surplus in Central Government’s fiscal accounts as compared to a deficit of $7.2 billion for the same period in the 2020-2021 fiscal year.

The bulletin said that aggressive monetary tightening in response to surging inflation is contributing to a denting of global economic prospects and as economic activity picked up with the loosening of covid19 restrictions reserves declined to a daily average of $2.6 billion in July this year as compared to $6.6 billion in December 2021.

Central Bank suggested that there was a need to advance structural reforms to better position the economy to penetrate export markets, as Trinidad and Tobago will continue to grapple with inflationary concerns and stronger competition worldwide.