PORT-OF-SPAIN, Trinidad,

(CMC):

Trinidad and Tobago's central bank Governor Ewart Williams has warned that trade in the Caribbean will be affected by the economic recession now plaguing the United States.

"The current recession affects the demand there is for goods and services. If there is less demand for our goods internationally, then our economy will feel the impact. One can never say there will be no impact on us," he told reporters after the launch of the secondary market for government bonds on Monday.

Delivering the State of the Union address on Monday night, President George Bush acknowledged that the economy was undergoing "a period of uncertainty".

Tax relief

In recent days, Bush has reached out to congressional Democrats on a US$150 billion plan to provide tax credits and rebates to an estimated 117 million families, along with tax incentives for businesses to invest in new equipment and plants.

Williams said that if the global price for oil drops as a result of the recession and economic situation in the US, Trinidad and Tobago's development plans would be severely affected.

Linked to oil

"Our main export is oil. Of 10 billion of total export receipts, nine billion comes from oil. One can never say there's going to be no impact. There is going to be an impact and if the price of oil falls, we are going to be affected in a serious way given the fact that government's revenue for oil impacts government's expenditure and that is what drives the non-energy sector.

"I don't want to say that we are not going to be affected but certainly it's not fire and brimstone," he added.

The new secondary market for government bonds trading is one item from a list of initiatives which the central bank has implemented over the last few years in hopes of improving trading of government securities.

Williams said for some time the development of the country's capital market has been seen as critically important to the stock market development and the country's economic growth.