Six months after the World Health Organisation announced an end to the Covid-19 pandemic, declaring that it no longer constitutes a public health emergency of international concern, the economy of Trinidad and Tobago was said to be on the rebound, with positive growth being experienced.
In last month’s 2024 budget presentation, Finance Minister Colm Imbert said: “Madam Speaker, I am pleased to confirm that economic activity rebounded in Trinidad and Tobago in 2022 under the influence of favourable terms of trade.
“After contracting by one per cent in 2021, which was eight per cent better than the situation in 2020—the COVID-19 onset year, our domestic economy grew by 1.5 per cent in 2022. Further, growth continued in the first quarter of 2023 at a rate of three per cent. Significantly, and from a diversification perspective, economic growth was driven by a buoyant non-energy sector, which expanded by 5.8 per cent in 2022.”
However, that economic expansion has not translated into increase consumer activity for some wholesalers and retailers.
Decline in consumer spending
Last week the Business Express spoke with several retail businesses in San Fernando and Chaguanas. Most of them reported a drastic decline in consumer spending with little to no customer traffic, especially since Divali is normally a peak period for consumption.
At Fabric Land on High Street, San Fernando, manager Sita Jattan said Divali is customarily a good period for their business, but this year it has been different.
“Prior to Covid-19, activity would ramp up around this time straight into the Christmas season, but that has not been the case thus far. I believe people are assessing the country’s economic position before they spend. However, we ‘re hoping that things will pick up over the next few days.
Cindy Raghoonanan of the Bollywood Indian Expo expressed similar sentiments.
“The flow of customers we usually experience has lessened. People are seeking out cheaper items to purchase.
“Some people have less disposable income compared to previous years, or they’re spending less due to increase in retail prices and/or more taxes. But, definitely, people are spending less,” Raghoonanan said.
She noted that not even extending their hours of operation, which they normally do at Divali to accommodate parents who may need items for their children’s participation at their school’s Divali celebrations, or lowering a lot of their prices to accommodate low-income earners, have served to generate in uptick in consumer activity.
When the Business Express visited LF Trading on lower High Street, things appeared to be a bit bleaker as there was a solitary customer who purchased one item.
Manager Robert McKnight said the lack of customers tells the story.
“It’s been very, very slow, whereas in the past it was not like this,” McKnight said.
He said he believes a combination of the economic fallout from Covid-19, a depressed economy, and taxes, all contribute to a decline in consumer spending.
And across at Nandlal and Sons, one of High Street’s longstanding retail outlets, Alvin Bahadoorsingh said within recent times High Street has been a lot slower in terms of economic activity.
“There has been a huge damper on consumer activity with the closure of Petrotrin, together with the downsizing of a lot of companies including those who would have gotten contract work from Petrotrin.”
He said consumer spending at this point and into the Christmas season will be dependent on the level of employment that exists and the promise backpay to public servants before Christmas.
In Chaguanas, the mood was much the same, with Suresh Bachu, owner of Bachu’s Fabric and Home Furnishings, stating they were way short of what was anticipated.
“Right now, we doing about 50 per cent of what we anticipated. However, we understand the current state of the economy, so we’re hoping for the best.
Bachu noted that the week leading up to Divali is usually their best time of the year in terms of sales, but this year it was simply not the case.
“We planned for this actually, but some businesses with huge overheads and a significant number of employees will feel the pinch,” he said.
Adam’s Variety Store also expressed a general decline in sales along with a hope for improvement.
“We sell traditional items of clothing people wear at Divali, so we expect that we would have an increase in number of customers visiting our business. But, whereas in the past we would experience more customer traffic around this time of the year, sales post Covid-19 has been generally slow,” said one of the managers.
Both Pennywise and Xtra Foods voiced a decline in consumer activity following their usual month-end sales.
Pennywise’s Dyanand Persad said it would be difficult to say if there’s an increase in sales for Divali, but they’re preparing for the Christmas season, and Divali falls smack in the middle of it, so they expect to see some increase in activity.
“Based on what we’ve experienced in years gone by, we would have a very good flow at Divali. However, coming out of the pandemic there has been a slowdown in activity as it relates to national celebrations,” said Vidya Mangroo of Xtra Foods.
Underlying issues
When the Business Express reached out to Daphne Bartlett, president of the San Fernando Business Association, she said the issue is far greater that just a slowdown in economic activity, but one of massive unemployment and a reduction in citizens’ standard of living, which would ultimately impact negatively on the retail industry.
“The low level of sales in the retail sector is a reflection of our economy at the moment. Employment is at an all-time low as far too many companies have closed down during the last eight years,” Bartlett said.
Focusing her attention on South Trinidad, she added: “For example, the closure of (Arcelor) Mittal and Titan Methanol resulted in low energy activity in the energy sector. The closure of the refinery at Pointe-a-Pierre was the hardest blow for us.”
Bartlett noted that with gas production having fallen by about 30 per cent and drilling falling by a similar margin, employment in the energy sector has fallen by about 54 per cent.
“When all these industries were shut down there was a vast number of persons who became unemployed. Many of these former employees became homeless which is very evident when you walk on the (Harris) Promenade. They are well dressed with a suitcase walking aimlessly.”
She said the recent increases in fuel prices and the resulting increase in taxi fares have contributed to less commuters coming to the city of San Fernando to shop. As often as they would have done prior.
Noting that the increase in unemployment serves as a catalyst for an increase in criminal activity, Bartlett said: “I cannot even in my wildest dream what got into our prime minister’s head to close our refinery. For the years 2016, 2017, 2018 and 2019 the government never had to give subvention to Petrotrin. Why close it then?
“The refinery along with the downstream industries kept the southern part of the country alive. Now we are on the verge of going into a coma. We in our organisation hope that good sense would prevail and he would reopen the refinery very soon.”
Bartlett noted that the challenges small and medium enterprises face in accessing foreign exchange is another factor.
“We see the few big businesses accessing most of the available forex. You don’t have to second guess that, just go into one of their outlets and you would see a plethora of unnecessary foreign goods on their shelves. We need more equitable distribution of our available forex.”
Asked what should be done to help improve the country’s economic position, Bartlett responded: “We need to reduce the number of unnecessary items which are imported and we need to expand our tourism and agricultural sectors.
She said in light of the fact that the energy sector has slowed considerably, there’s an urgent need to beef up earnings from tourism and agriculture, while they also contribute to the creation of much-needed employment.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Trinidadexpress.com – https://trinidadexpress.com/business/local/has-our-economy-rebounded/article_e33afe38-8355-11ee-a6a7-7baac5b13939.html
