The Carnival bump

THE CENTRAL BANK’S most recent bulletin underlines the value of seasonal festivals such as Carnival to our overall economic outlook, as well as the resurgent role of the non-energy sector.

According to the latest report, issued on Monday, the economy grew by 4.1 per cent in fiscal 2022, a rate surpassing growth in advanced economies (2.7 per cent) and emerging markets (3.9 per cent).

This growth was driven primarily by a strong expansion of the non-energy sector by 10.5 per cent.

In contrast, the energy sector reportedly declined by 2.5 per cent, even amid the spike of global fuel prices due to the Russia/Ukraine war and the fallout from the covid19 pandemic.

Notably, the report struck an optimistic note when it comes to business activity and consumer demand.

“Barring a major resurgence in the covid19 pandemic, the restart of national festivals and ancillary activities, such as the return of cruise ships, are anticipated to be components of a more durable and broad-based recovery,” the Central Bank said.

The Carnival season has already shown signs of being a robust one, as more and more people return to their annual calendar of events. It is, however, not the only event on our annual calendar that can make a meaningful contribution to economic activity.

Aside from Tobago’s own foray into Carnival, there are countless other activities and events on our cultural calendar which, if properly organised, sustained and promoted, can also come to have a similar boost effect.

In the meanwhile, it is important to acknowledge the impact of the diaspora on our economic fortunes.

The recent slogan adopted by the national airline, Caribbean Airlines Ltd – Welcome Home – speaks to the fact that a lot of our visitor arrivals comprise people from this country returning home to visit.

Similarly, our Caribbean neighbours are an important source of tourist arrivals.

The Prime Minister’s visits to Guyana and The Bahamas this week, in which he participated in key energy talks as well as Caricom meetings over regional issues such as the situation in Haiti, also underlines the continued need for engagement with our regional partners as we attempt to get our economy back to a robust situation.

The official figures suggest unemployment last year stood at 5.4 per cent by the third quarter of 2022.

However, there was a rise in headline inflation, including a 13.8 per cent surge in food inflation plus a 6.6 per cent jump in core inflation.

“The surge in international food commodity prices, supply disruptions and adverse local weather conditions helped push headline inflation to 8.0 per cent in November 2022 – the highest rate since late 2014,” the Bank noted.

Its observations in this regard contrast somewhat with the view held by government officials who have effectively accused retailers of price gouging and have asked for them to reduce prices in light of decreased international prices.

While the outlook for the economy is bullish, it is nonetheless contingent on a range of factors and qualified by the complex issues affecting the cost of living, including expected increases in utilities.