By Clint Chan Tack Sunday, July 1 2012

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FINANCE and Economy Minister Larry Howai...

FINANCE and Economy Minister Larry Howai yesterday expressed disappointment that the level of headline inflation in the country has increased. Howai expressed his disappointment as he commented for the first time as Finance and Economy Minister on this issue.

Speaking with Sunday Newsday, Howai said: “I am disappointed to learn that inflation is up.”

He continued: “I have not seen the repo report but I am concerned that the Central Bank of Trinidad and Tobago might have to consider tightening monetary policy soon.”

In its rep rate announcement for June, which was issued on Friday, the Central Bank reported that headline inflation in the country had risen from 11.8 percent in April to 12.6 percent in May.

The Bank said food price inflation remained the main driver as the headline inflation rate accelerated to 28.3 percent in May from 26.1 percent in April. The Bank said, however, while the rise in headline inflation is a cause for concern, it has largely reflected increases in food prices and available data suggests that underlying demand pressures remain relatively contained for the time being.

Noting there is still room in the current economic climate for further expansion in private sector credit to support economic recovery, the Bank said it is maintaining the repo rate at three percent.

When the Bank’s repo rate announcement for May reported that headline inflation rose from 9.1 percent in March to 11.8 percent, then Planning and Economy Minister Dr Bhoe Tewarie said any rise in inflation is of concern to the Government. The economy aspect of Tewarie’s ministerial portfolio was reassigned to Howai when the latter was appointed to the Cabinet on June 22. Howai was sworn in as Government Minister and Senator on June 25.