Evidence of a growing economy
The announcement by the Central Bank Governor that there has been a one per cent growth in the economy in the third quarter of 2012 is good news.
Even the MFO poll is showing that people’s confidence in the economy and the country is improving. I think he was being cautious about 2013, given the fact that only a small one per cent growth has occurred. What I will find interesting will be the methodology used by Central Bank to measure growth in GDP and in the economy.
An objective look at the physical evidence of business expansion across the country reveals that several new businesses have been springing up, especially in Rio Claro (big mall one mile off the town centre), Penal/Debe, Siparia and Chaguanas (check Joyce Road).
The Caparo area is also seeing massive business expansion. These businesses are both in the service and construction sectors as well as in the field of entertainment. The start up of private houses in rural and suburban areas rival the houses in Valsayn, Westmoorings and Gulf City.
In Chaguanas along Ramsaran Street, major investments have been made by Kampo and MoJo as well as by smaller restaurants which have revised their business model. I did a check along the route from Cuchawan Trace to Latchoos Road in Debe and counted 320-plus businesses. Three years ago several of these spots along the stretch in Debe were residential properties.
How is gross domestic product (GDP) calculated? Has the basket changed, and if so, when? Are new entrants into the field of construction included, especially since there has been a new group of entrepreneurs who have emerged. These were the persons who were working as sub-contractors for the traditional firms. It might be there is a large sector of the economy that is unaccounted in the calculation of GDP.
It would also be interesting to see what is the level of consumer credit in 2012 over 2011 as well as borrowing for business expansion over the same period. The latest Central Bank statistics should be able to tell us this.
Apart from these trends, the sale of new cars has been phenomenal. The PCX series started in September 2012 and is already finished. Ten thousand new vehicles sold in four months! That is approximately 2,500 vehicles per month or 100 plus per working day.
If people lacked confidence in the country, would they buy vehicles, invest in business and engage in consumer spending as they are doing?
Restaurants are filled to capacity. In Gasparillo over the last month, Mario’s and Burger King have opened to join Royal Castle and KFC.
In Chaguanas there are three branches of Mario’s and Wendy’s is just about to open in upper Montrose. Is this a sign of a lack of confidence? Drive through Charlieville and you will see a whole new set of businesses which have developed.
I pose the question once more: how is GDP being measured?
In my own estimation, the growth in the country is perhaps more than one per cent, that is, if real business expansion and housing stats are included.