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Financial News

Mar 2015 Financial News

Inflation decreases to 6%

Mar 31, 2015

Headline inflation slowed for the third consecutive month in February to just over six per cent from nine per cent in November 2014, the Central Bank said yesterday. “The slowdown in food inflation, as a result of higher food supply and favourable weather conditions, contributed to the deceleration in headline inflation. This easing in headline inflation may be short lived, as inflationary pressures are expected to pick up in the rest of 2015 due to a number of factors,” the Bank stated in its latest Monetary Policy announcement.

“Growth of consumer credit remains robust, increasing by nearly 8 ½ per cent in January 2015, suggesting consumers are still willing to spend despite negative sentiment surrounding falling oil prices.

Current and expected settlement of wage negotiations for teachers, civil servants and other public sector workers with considerably large retroactive payments and salary increments will boost consumer spending and further stoke inflationary pressures.”

The Bank said expansionary fiscal stimulus remains on track. 

Central Government’s spending on its capital programme was higher by seven per cent in the first four months of FY2014/2015 when compared to the corresponding period one year ago.

The Bank stated: “Over the final quarter of 2014, economic growth was buoyed by further positive momentum in the non-energy sector, even as activity in the energy sector was marred by maintenance work. Discussions with upstream energy producers suggest there was no carry-over of maintenance-related activity into early 2015 and the start-up of BGTT’s Starfish well is expected to provide a fillip to upstream gas production in 2015. Both natural gas and crude oil output were higher by almost two per cent and 12.5 per cent, respectively, in January 2015. The near-term outlook for the non-energy sector is for continued steady performance, albeit at a slower pace than in 2014.”

At its March meeting, Central Bank’s Monetary Policy Committee (MPC) agreed to raise the ‘Repo’ rate for a fourth consecutive time by 25 basis points to 3.75 per cent. 

The MPC also agreed to continue with an aggressive programme to absorb excess liquidity so as to strengthen the impact higher interest rates are expected to have throughout the financial system.

 

Source:
Trinidad Express
Saturday March 28, 2015

http://www.trinidadexpress.com/business/Inflation-decreases-to-6-297855651.html