Shallow recession ‘now looks likely’
Friday 24th April 2009, 2:30PM BST.
TREASURY minister Charles Parkinson has admitted Guernsey could enter a ‘shallow recession’ this year.
He said despite the island avoiding going into recession in 2008, there was evidence of a further slowdown in 2009.
‘It would not be surprising if Guernsey was to experience a shallow recession.
‘Our consultant Rothschild has modelled a decline of 2.7% for this year and flat for next year and that is a realistic possibility.’
It means Deputy Parkinson (pictured), who was speaking at this week’s Chamber of Commerce lunch, has lost some of his optimism from earlier in the year.
In January, he predicted Guernsey would experience zero growth for 2009 and show the economy was considerably resilient.
He said his change in outlook was due to the models he had seen and the fact that the recession in the UK over the past three or four months had been much deeper than the UK Treasury or the Bank of England had been expecting.
- To read Guernsey Press stories in full, click here for subscription details. Individual editions are now available online.
Island Life
All about Guernsey
Ambassador of the Year 2011
History & Heritage
Visitor Information
Guernsey's government
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
This is Guernsey
Guernsey Press
Useful Links
Haven’t T and R got staff with the ability to forsee the chances of a recession hitting Guernsey?
Why use consultants and their “models”.
I would venture that most posters would have come to similar conclusions as the consultants that things would get worse before they got better. Just how meaningful, anfd useful is the figure of 2.7%. I make the downturn as 2.8% which as a figure plucked out of the air and usinf a little common sense is about as valauable as the expensive consultants figures.
Time for salaries of some of the more expensive civil servants to be revised downwards. They clearly are not up to the job as the need to use consultants shows.
Report abuse
“Our consultant Rothschild has modelled a decline of 2.7%…”
Why on earth pay a consultant for this?
Any number of contributors to Your Shout could have sat down and given a similar ball park figure.
Don’t be fooled by the word model. It just gives some shallow credibility to guesstimates, for which you can charge thousands of pounds.
If there aren’t civil servants in T and R who cannot come up with similar findings then we should take a long hard look at these senior staff with a view to sacking them or at least reducing their salaries.
Can Guernsey afford to pay senior staff to do a job and still pay consultants to effectively do the job?
Report abuse
Stephen T&R do have the staff but they wanted an independent assessment as well, I don’t think that is unreasonable.
Report abuse
As someone who is already strongly feeling the effects of this ‘recession’ or whatever else the so-called experts call it, I’m really not too bothered about the politicians and civil servants’ percentages or guesstimates.
When will all the talking to stop, and the action to begin Mr Jones?
Report abuse
How independent is it though? Who should know the needs of the island better than its public servants and politicians? If they don’t then i suggest they are in the wrong job.
The money spent on Consultants could have been spent on providing services instead of lining the pockets of the private sector who could just be hoping that if they say the right thing they will get more work; either through out-sourcing or more consultancies.
Report abuse
Dave Jones
What are the States going to do now it has received the independent view? What is the practical value of the exercise?
The T and R minister is quoted as saying ‘”It would not be surprising if Guernsey was to experience a shallow recession”
I am assuming that the minister came to this conclusion through his own process of thought.
My point Dave is what does the 2.7% really mean? Even the Minister makes the comments that these projections are a possibility. Possibility, not likely, or probable.
I would still expect the Civil Servants to come up with a ball park conclusion that a recession was possible. There are enough representative bodies who would confirm this.
Sorry Dave, this is a waste of money on an exercise that does not justify the cost of an independent consultant, and their niche market selling point of modelling.
But Dave, you may be better informed, that perhaps the figures of the consultancy surprised T and R and its staff. If that is so, then clearly we have the wrong people in situ.
Report abuse
“Can Guernsey afford to pay senior staff to do a job and still pay consultants to effectively do the job?”
The answer is a resounding “no”. Unlike the Isle of Man, Faroes etc, Guernsey said he couldn’t afford to help stricken savers, saying it had little or no spare cash.
What little it has has been earmarked for the airport extension, school refurbishment etc. Remember?
Report abuse
Dave Jones
Any chance of a comment on my questions “What are the States going to do now it has received the independent view? What is the practical value of the exercise?
Thanks
Report abuse
Unfortunately with LT saying one thing and T&R saying another, using an independent is the only way to stop the battle between the pragmatists and the spinners.
But, in essence, I don’t see any value of guessing the level of a recession. 2.7, 4.3 or 0.1 – what does it matter? and what are the benefits of guessing a figure?
Report abuse
Stephen John – Excellent question, but i think its a question for Charles Parkinson to answer, not Dave Jones. Dave Jones has been quite good in terms of trying to answer questions in the GP, it would be good if other politicians could be so bold.
Maybe Charles Parkinsons statement will be followed up in next weeks GP? What will the response be to the independent report? My guess is that response will be something like… “because the recession will be drawn out longer than what we expected then we may have to look at increasing taxes to fund major projects”… – what a surprise that would be.
Report abuse
Stephen they are looking at what the review throws up and comparing it with the Fiscal economic group and T&Rs forecast we will have a much better idea of which forecast is more accurate when we have the next quarterly ETI receipts. T&R will have a slightly better view of the condition of our economy. Given Lyndon’s statement in the States on Wednesday that those receipts are significantly better than could be expected considering the global economy, I am confident that the team at T&R will come forward with more detailed calculations in the near future but I certainly don’t think that getting an independent analysis was a waste of time. The practical value of it is that it is someone else’s opinion other than our own and from people who have no political axe to grind.
Report abuse
I agree with Wil that Deputy Jones has a good record in trying to inform the public.
However, whatever angle I look at this it is money ill spent.
Whilst getting other views is to be commended i cannot believe this guesstimate wrapped out as fiscal modelling actually helps decision making.
I would equate it to a printing group who a few tears ago set up a market research department to find out how much of the paperback market they had. The exercise cast a small fortune and concluded the group had 0.789% of the market.
The new and costly market researcher, oddly enough wwith a surname from the creme de la creme of investmant banks: was soon terminated when many of the staff were heard to ask why the expense, when we could have told you figure was less that 1%.
So far as having an axe to grind, surely the Civil Service has less of an axe to grind than a business seeking consultancy.
If the various figures are going to be validated by the ETI figures, why bother to do any guesstimating. Just wait for the ETI figuures.
On ETI figures I bet any increase will be consumed by the increase in the public servant wage bill. So not much help there. Still it spikes what might in a few months time, be a good heading in the Press that the ETI figures are up so all is well.
Report abuse