Jun 2015 Financial News

Pressure on: inflation expected to rise

Jun 05, 2015

Trinidad and Tobago's rate of inflation is expected to rise this year because of pressure on food prices and continued spending on motor vehicles and other goods, the Central Bank has warned.

The bank said its Monetary Policy Committee was concerned about rising inflationary pressures.

This was disclosed on Monday during the latest Monetary Policy Forum, hosted by the San Juan Business Association, at the House of Angostura, Laventille.

A Central Bank statement released at the meeting said: “Based on the recently rebased Retail Prices Index, headline inflation stood at almost six per cent in April 2015. Core inflation accelerated to a ten-month high of around two per cent in April 2015.”

It said the committee expects inflationary pressures to further pick up in the rest of 2015 due to a number of factors:

• the rainy season has begun with the possibility of flooding causing disruptions to agricultural supplies and the attendant effect on food price inflation, which continues to drive overall headline inflation. As at April 2015, food inflation stood at nine per cent, close to double-digit territory;

• growth of consumer credit remains strong, suggesting consumers are still willing to borrow to finance the purchase of new motor vehicles and other consumer durables, despite subdued economic conditions.

“We expect recently concluded wage agreements with teachers and civil servants, as well as successful settlement of outstanding negotiations with the Police, Fire and Prison services to increase consumer spending and inflationary pressures,” the Central Bank stated.

Source:
By Laventille
Trinidad Express
Friday June 5, 2015

http://www.trinidadexpress.com/20150605/business/pressure-on-inflation-expected-to-rise