The Central Bank of Trinidad and Tobago (CBTT), says the labor market is slowly recovering from the shock of the COVID-19 pandemic.
According to the latest economic bulletin released by the bank, the latest official labor market data points to an unemployment rate of 5.1 percent in the first quarter of 2022, down from 6.5 percent recorded in the corresponding quarter of 2021.
Data from the Ministry of Labor also shows that 839 persons were retrenched in the seven months to July 2022 compared to 941 persons in the comparative period a year earlier.
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“Following two consecutive years of decline, the number of job advertisements published in the print media during the first eight months of 2022 increased by 16.9 percent (year-on-year), implying that the demand for labor may have improved.
Concerning the energy sector, the report noted that energy commodity prices continued to soar due to high demand from the reopening of economies in the first instance, as well as supply disruption caused by the Russia- Ukraine war.
“The Energy Commodity Price Index (ECPI) increased 73.4 percent (year-on-year) over the period January to July 2022, with all commodities tracked by the index recording robust growth. West Texas Intermediate (WTI) crude oil prices increased 59.6 percent over the period to an average of US$101.31 per barrel, while US Henry Hub natural gas prices increased 96.0 percent to US$6.21 per million British Thermal Units (MMBtu).
It added that the post-pandemic domestic economic recovery is yet to be firmly established.
“Quarterly real GDP data published by the Central Statistical Office (CSO) for the first quarter of 2022 showed a decline of 0.1 percent (year-on-year). Though activity in the non-energy sector rebounded (2.2 percent), activity in the energy sector declined by 5.1 percent. Within the energy sector, production was mixed; while on a year-on-year basis output of natural gas (5.6 percent), LNG (2.0 percent), methanol (7.4 percent) and urea (53.0 percent) slipped, there was an expansion in the production of crude oil (2.2 percent) and ammonia (2.5 percent).”
The CBTT said moving forward, policymakers, globally, are still combatting high inflation without unduly curtailing economic growth.
“The International Monetary Fund (IMF), in its July 2022 World Economic Outlook (WEO) Update, reduced its growth outlook for 2022 to 3.2 percent, 0.4 percentage points lower than its forecast in April 2022. Prospects for a soft landing for economies such as the US appear limited, with financial markets already reflecting recession concerns.”
The bank said energy commodity prices are anticipated to remain elevated over the medium-term given the ongoing geopolitical turmoil. While global initiatives to supplement supply shortages have the potential to relieve some supply-side pressure, the protracted nature of Russia’s conflict with Ukraine and the resultant mounting sanctions and disruptions to supply chains are also expected to keep prices relatively firm over the next 12 months.
On the domestic front, the central bank noted that economic activity is expected to improve in 2022.
CMC/
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