Central Bank Governor Williams: Unemployment rates rising

As the trade union movement prepares for a mass demonstration on Friday, Central Bank Governor Ewart Williams said yesterday that he does not expect the industrial unrest to continue into 2012. That’s because “unions lose their clout” when there are high levels of unemployment, said Williams. He was speaking at the Central Bank’s bi-annual Monetary Policy Report media conference yesterday. Williams said unemployment rates were rising. “People tend to focus more on job security than wages,” he observed. The labour movement has called on all workers to participate in a mass demonstration through the streets of Port-of-Spain on Friday to protest the “three months of siege, under a repressive state of emergency.”

In August, Williams had said a general strike was “the worst possible thing” the T&T’s fragile economy faced. The last unemployment data available was for the last quarter of 2010 which pegged unemployment at 6.3 per cent. But the Governor observed that retrenchment notices for the third quarter of 2011 were twice as  much compared with the corresponding period in 2010. For 2011, about 15,000 jobs were lost in construction. “We suspect with the State of Emergency, that retrenchment continued in the last quarter of 2011. We await new information on the unemployment rate,” he said.

The 106-day SoE and the curfew, he said, had a “more pronounced” impact on the economy than originally envisaged. Williams said the SoE impacted on hours worked which affected production of small businesses as well as the distribution sector. In addition, the economy also faced challenges with weak private sector confidence and declines in the oil and gas sectors. This, he explained, led to an overall negative impact on the country’s Gross Domestic Product for 2011 which is estimated at 1.4 per cent.

But the country’s fiscal deficit for 2010-2011 budget was about $5 billion compared to the budgeted $7 billion, the Governor said. Williams dismissed the suggestion that the economy’s forecast was gloomy. In 2012, the economy could recover. The onus, says the Governor, lies with the Government’s ability to implement the Budget which would generate jobs and revive the construction sector from the doldrums. “Fiscal policy should take the lead in the economy. It has