Friday, November 24 2006

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Inflation chart: Table shows increases in headline and core inflation....

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THE BUSINESS community last night expressed alarm that inflation had reached double digits — ten percent — and is worried that the situation could get worse before getting better.

CMMB economist Jwala Rambarran said this was a dangerous state of affairs and he was concerned that inflation could climb to between 12 to 13 percent within the next two months. Rambarran explained that this could occur because the effects of recent price hikes such as those on chicken, pork and electricity have not yet been felt in the economy. He said while measures such as those on the issuance of $700 million in bonds would help, effects of such a measure would not be immediate. TT Manufacturers Association president Paul Quesnel recalled that the country witnessed 20 percent inflation in the 1980s and noted that it seemed like history could be repeating itself. “There does not seem to be any indication that it will fall in the near future,” Quesnel stated. He also said several TTMA members are complaining that they are experiencing difficulties in purchasing foreign exchange from the commercial banks yesterday. San Juan Business Association (SJBA) president Gail Merhair said, “This is something that we feared.” Merhair said double digit inflation spells bad news for the business sector as it meant reduced end of year revenues and higher operating costs. She said consumers will feel the pinch through price increases in food and other items. Merhair said TT cannot afford to deal with inflation on the same level that it is currently grappling with crime and this is “another level of crisis” which the nation has to face.