see the inflation risk as serious and imminent, they are taking expansionary monetary and fiscal action. in the bank ’ s view, for trinidad and tobago, with inflation already at 14. 8 per cent, inflation reduction should be priority number one. in the overview, we make the point that a quick return to single - digit inflation is critical for reversing inflation expectations and bringing inflation down to 6 - 7 per cent in the medium term. one cannot have sustained growth and improve the quality of life of the population until inflation is brought under control. the downward trend in global food prices will help to reduce food price inflation ; expected increases in domestic agricultural production and increased food imports from guyana should also help to bring down food prices. the government has indicated that it will respond to projected reduction in energy tax collections by trimming expenditures. the central bank is committed to tightening the monetary stance as required. dealing with wage demands could present a challenge. high inflation and in particular, high food price inflation have seriously eroded the real incomes of workers and understandably this is going to be reflected in their wage demands. how we deal with this will determine whether we achieve a reduction in inflation or whether we face the risk of a wage / price spiral. we continue to believe that the best way of resolving this is through dialogue ( a social compact ) between the major stakeholders finally, the mpr touches on a worst - case scenario ( hopefully, highly unlikely ) in which oil prices fall below us $ 40 per barrel with corresponding declines in gas prices. we argue that our economy is in a better position now to withstand such a worst case scenario ( given our level of reserves, low external debt, the hsf etc. ). obviously addressing such a worst case scenario would call for major adjustment in both the public and private sectors. thank you ladies and gentlemen.

ewart s williams : trinidad and tobago – state of the economy and short - term prospects remarks by mr ewart s williams, governor of the central bank of trinidad and tobago, at the monetary policy report media conference, port - of - spain, 17 november 2008. * * * good morning, ladies and gentlemen and thank you for joining us. before i discuss today ’ s monetary policy report, which reflects the central bank ’ s latest thinking on the economy, i would like to say a few words about the global financial crisis. the honest truth is that it is difficult to make an informed assessment about the state of the crisis since each day brings more depressing news. there would seem to be sufficient evidence to suggest that the risk of a total melt - down of the world ’ s financial system has receded somewhat, though all the accompanying ills are still with us. while solvency concerns have eased in the light of official commitments to use public funds to recapitalize financial institutions, lingering uncertainty has impeded the proper functioning of money and capital markets. thus, we are seeing unprecedented volatility in the world ’ s major equity markets ; liquidity preference, risk aversion, and bank spreads remain at elevated levels. perhaps the big legacy of the financial crisis may be a global recession. the us is now in recession ; the uk has been in recession for a few months now ; and on friday, the euro zone conceded that recession had arrived. ( one last word on the international economy ) contagion has finally reached developing and emerging market economies, all of which will experience slowdowns. even so, the entire increase in global growth in 2009 is expected to come from these economies. the industrialized economies as a group are projected to decline by as much as 1 per cent. emerging and developing economies are projected to grow by around 5 per cent ( most of it from china and india ). it is not surprising therefore that the historic talks held in washington dc over the weekend ( some called it bretton woods ii ), were not among the g7 or g8 ( as is the custom ) but among a broader group called the g20 countries. many observers see this as a clear recognition that the world could not get out of its present predicament without, china, india, saudi arabia, brazil, and a host of others … they are providing the growth and they have reserves to pull even the developed countries out of the present dilemma. we will have