Thursday, November 12, 2009

1.4% Decline in Savings Was Termed Bleak

In his Insider's View published back in August 2005 the Finance Minister lamented that our national savings rate had dropped from an average of 26.0% in the first Navin Ramgoolam government to 24.6% under Federation 2. He goes on to say (see paragraph 17):

CSO is forecasting a very low savings rate of 19.5 per cent for 2005. Here again, we must be utterly concerned. Firstly, because as a nation we are consuming at a faster rate than we are producing. Secondly, because the savings rate is below the investment rate. This will exert demand pressures on prices and will have an adverse impact on the current account of the balance of payments.

Fast forward 4.25 years and the savings rate is now at a 30-year low of 12%. I haven't heard him on that yet but I wouldn't be surprised he's so shattered that he can't find the right words to express his anguish. But I also wonder how all this happened. Any clues?


Mevin said...

Its a surprisingly low figure and putting much stress on the internal and external debt servicing. The future generations, who will be paying the bill, will surely not be happy to learn on the circumstances generating such scenario.... but who cares after

Sanjay Jagatsingh said...

Quite distressing indeed. Three cheers for the 'new model'...