Port-of-Spain, August 29, 2006...The Trinidad and Tobago Manufacturers Association (TTMA) and the Downtown Owners and Merchants Association (DOMA) yesterday expressed concern over rising inflation in TT and called on Government to curb expenditure in certain large scale energy and construction projects in order to reduce inflationary pressures on the economy.

In a statement, the TTMA said it was concerned over the Central Bank’s recent statements that rising food prices are continuing to add to inflationary pressures in the economy.

The TTMA said it has repeatedly warned about the possible impact of inflation on the economy and manufacturers’ competitivenss.

The TTMA said rising inflation reduces manufacturers’ competitiveness by pushing up their production costs and “we then find ourselves having to charge more for the goods that we export.”

The TTMA said it agreed with Central Bank Governor Ewart Williams’ call to boost domestic agricultural production in order to tackle rising food prices in order to curb inflation. The TTMA also said it was important to note that the Central Bank’s pamphlet on inflation states that inflation tends to rise during periods of economic boom and fall during recessionary periods. The TTMA called on Government to reduce its levels of expenditure or slow the pace of its developmental initiatives in order to curb inflation in TT.

The TTMA also urged Government to follow the International Monetary Fund’s advice to invest the nation’s energy windfalls in long term socio-economic objectives and pace energy revenues to avoid overheating the economy.

DOMA said it was concerned about the continuing increase in the repo rate by the Central Bank and that TT could experience a steady increase in bank interest rates of the order ot 17 to 18 percent at the end of the first quarter of 2007.

DOMA said several of its members are concerned about the cost effect that this would have on their existing loans and commitments.

DOMA shared the TTMA’s view that Government should adjust its developmental agenda in order to reduce inflation in TT.

DOMA suggested that Government consider delaying proposed construction of aluminium smelters in South Trinidad and place more emphasis on initiatives such as the rapid rail project.

DOMA added that once the situation improves, Government’s emphasis could be shifted back.