Bring the data debate

ECONOMIES are sensitive to what people say. Investor confidence, consumer spending, market speculation and policy interventions can all hinge on words. What people say about an economy is almost as important as how that economy has performed.

And, to this extent, we have some sympathy for the overcautious approach of officials in the Ministry of Finance – including Minister of Finance Colm Imbert – when various officials make remarks which touch on the state of the economy.

If everyone believes the market is bullish, it’s more likely that that situation will come to fruition. If everyone believes the market is bearish, that too could be a self-fulfilling prophecy.

But at times, disagreement over the analysis of economic statistics and the findings of agencies like the International Monetary Fund (IMF) can become so heated, so toxic as to distract us from what the focus should be: grappling with what needs to be done to move the economy forward proactively.

Over the weekend, Mr Imbert and UWI lecturer and economist Prof Roger Hosein sparred over the IMF’s most recent Article IV consultation.

The IMF found TT’s economic activity to be “recovering, supported by higher global energy prices and the rebound of the non-energy sector.” GDP is estimated to have expanded by 2.5 per cent in 2022. The financial sector appears well-capitalised. Public debt has declined. The possible windfall from new renewable-energy projects has affected the balance of risks.

But Prof Hosein sees things differently. He has suggested the IMF’s interpretation of its own data is “flowery,” which we take to mean over-optimistic. He feels economic growth and GDP are not as good as suggested.

Mr Imbert has described such a position as fallacious, mind-boggling, erroneous, ridiculous and without rational basis.

The professor has hit back, calling for a “seminar” on the state of the economy.

The truth is, when officials quibble over economic indicators, it can have the appearance of splitting hairs.

Academic debate is no substitute for the experience of citizens on the ground, most of whom bear the brunt of recurring structural problems in our economy – such as staggering inequalities – which have little relationship to oil and gas price fluctuations.

Prof Hosein is entitled to his opinions and to analyse statistics however he may wish to, within the realm of reason, but he cannot hold himself up as having the final say on the IMF’s data sets.

Mr Imbert, meanwhile, might gain from an approach which sees figures parsed in ways that ordinary people can engage with.

A public debate might not be the best forum to deal with complex economic issues. But it could be an excellent opportunity to amplify, outside the parliamentary schedule, the discussion on the economy.