Economist: Productivity needs improving in Trinidad and Tobago

WHILE there were several welcome measures in the 2022 budget, more needs to be done with respect to improving overall productivity in Trinidad and Tobago.

UWI economist Dr Roger Hosein expressed these opinions during a virtual UWI Economics Department post-budget forum on Thursday.

Touching on various aspects of Finance Minister Colm Imbert's budget presentation on Monday, Hosein said, "I think this budget was a step in the right direction."

He highlighted support for small and medium enterprises and tax incentives for exporters and technology-related businesses as some of the positive measures announced by Imbert.

But Hosein said there remain questions such as economic growth and labour participation. On the latter, Hosein was uncertain whether a 5.2 per cent unemployment rate, mentioned in the Review of the Economy document laid in Parliament on Monday, was accurate.

He said there was unemployment before covid19 and this was worsened when the pandemic hit. Hosein said some data suggested that some 41,000 people could have become unemployed as a result.

He also questioned the relative productivity of workers in the public and private sectors. While understanding the needs for transfers and subsidies to protect the most vulnerable groups in society, Hosein said more needs to be done to shift towards greater productivity.

Referring to steps being taken to gradually reopen the economy, Hosein said the success of those steps hinged heavily on as many people as possible being fully vaccinated against covid19. He cautioned that if there remains a large number of unvaccinated people, this could compromise their participation in the labour market and in turn, compromise the economy.

He also suggested there be proper data regarding Venezuelan migrant workers in TT.

Hosein argued that over-reliance on transfers and subsidies could be retarding real Gross Domestic Product (GDP) growth and the economy needs more breathing space to achieve this growth.

"We have'nt had growth since 2009 in any real way."

Referring to Imbert's comments about growth prospects in 2023 and a balanced budget one year later, Hosein said, "I think in the medium term period, we need to move ourselves away from balancing the overall deficit, to bringing the non-energy fiscal balance down to zero."

While having over US$7 billion in the Heritage and Stabilisation Fund (HSF) was good, Hosein believed there should be a higher amount in the fund. He said the HSF has proven helpful to keeping the economy steady during the pandemic.

Hosein hoped that in the coming days dialogue will continue between all stakeholders to ensure that equilibrium is found "to put this economy back on a realistic, sustainable growth path."