BASSETERRE, St. Kitts – DURING his 2008 Eastern Caribbean Currency Union (ECCU) Economic Review, Governor of the Eastern Caribbean Central Bank (ECCB) Sir K. Dwight Venner declared that although 2009 will present a number of problems, the newly-elected US President Barack Obama may bring hope to the ongoing economic crises.
“The financial and economic crisis which is now unfolding has been declared by the International Monetary Fund as the worst that the global economy has faced in 60 years. This crisis was preceded by two others, the energy crisis and a food crisis in 2008. These two crises exerted severe external shocks to our domestic economic systems and had negative impacts on our balance of payments,” Venner said at last night’s (Jan. 29) event held in St. Kitts.
Venner said households and firms in the US acquired significant levels of debt during the credit boom which is now being reflected in bankruptcies, layoffs and unprecedented levels of unemployment and hardship. He added that many large financial firms have had to close their doors leading to layoffs of thousands of workers while consumer confidence has fallen.
In projecting patterns for the global economic situation, Venner said “It is clear therefore, that 2009 will not be an easy year as the crisis continues. Its impact and ramifications have been so massive that most analysts and institutions are not prepared to forecast when it will bottom out and the recovery likely to begin.
“There are however, two factors which give a sense of optimism. First, after being in denial and hoping that the crisis would go away, the industrialised countries have begun to address the issues frontally. Second, the inauguration of the 44th President of the USA, Barack Obama.”
On January 13, Obama unveiled his economic stimulus package designed to revitalize the US economy in the short-term. The plan is expected to inject US $75 billion into the economy in the form of tax cuts primarily geared toward working families, seniors, homeowners and the unemployed.
The stimulus package also outlined a US $45 billion reserve to be pumped into the economy in the case of a deepened recession.
Venner said it is hoped that the “new and popular” Obama administration will be able to deliver the confidence and credibility required to turn the economy and financial system around.
