WHETHER by luck or through prudent economic management, the figures cited by Finance Minister Colm Imbert on Tuesday in the Senate paint a picture of an economy that is not only on the rebound, but which has fully recovered from the fallout from the covid19 pandemic.
GDP is on the rebound, according to Mr Imbert, citing data from the Central Statistical Office (CSO). The manufacturing industry expanded by 16.5 per cent. Professional and technical services grew by 61 per cent. Transport and storage grew by 27 per cent. Accommodation and food services expanded by 20 per cent.
“So based on the data, what we are seeing is our economy has fully recovered from coivd19 and, in fact, our nominal GDP today is higher than it was in 2015,” the minister, also acting as PM, said. “Our GDP today is US$28 billion as compared to less than US$26 billion in 2015.”
It is notable that levels have nominally returned to what they were in 2015, even as many will suggest we could have been in an even better place had the pandemic not occurred. The fact is the pandemic did occur and economies all over the world took a hit.
Still, even Mr Imbert must bear in mind the need for a broader consideration of how economic indicators reflect – or do not reflect – the quality of life enjoyed by the average citizen. For instance, some citizens' depleted savings during the pandemic or else are now dealing with expenditure caused by delays endured during that period.
Additionally, as noted by the International Monetary Fund (IMF) in its recent Article IV exercise, there is a need for more adequate CSO statistics.
“IMF staff welcomes the progress to improve the quality, timeliness and coverage of macroeconomic statistics, but some challenges remain,” the IMF said this month. “Transforming the CSO into an independent National Statistical Institute would help strengthen the country’s institutional capacity. It is encouraged to continue building on the recent efforts to broaden fiscal data coverage of state-owned enterprises and other public bodies.”
A good example of how the discussion could be broadened is in relation to inflation. It is all well and good when the bigger picture is positive, but there needs to be consideration of the ways ordinary citizens might still be hamstrung in their ability to spend and save – and not just in relation to gas prices and groceries (though these are obviously of importance).
The Opposition has noted inflated energy prices, occasioned by Russia’s invasion of Ukraine, may have played a role in the more robust picture. If that is the case, it also, certainly initially, impacted distribution channels and the prices of key commodities such as wheat. Global food prices have been settling, according to agencies like the Food and Agriculture Organisation (FAO), but remain higher than 2021 levels.
Such factors mean if the glass is way more than half full, as Mr Imbert contends, then there is still the possibility that gains could evaporate based on factors outside of our control. That situation remains unchanged.