THE TRIPARTITE BODY that supported Barbados during tough economic times 17 years ago may be needed to cushion the country in another "back-breaking" situation.

Central Bank Governor Dr Marion Williams made this call while addressing the one-day Public/Private Consultation on the Cost of Living at Sherbourne Centre on Tuesday.

"The tripartite arrangement which worked so well in the past I think is going to be called upon to deliver on this occasion," she cautioned.

Additionally, said the top economic advisor, there must be a holistic approach to fighting inflation, pointing out that factors such as retail and wholesale, fiscal management, wage negotiations and other measures must be taken into consideration.

Regarding the Central Bank's role in bringing monetary policy to bear against tough economic times, Williams said the bank had been trying to bring interest rates down but conceded that there had been little response from lenders.

Bring rates down

"The situation is that if we continued to bring rates down, we are not going to be assisting the consumer unless we can get a commitment to bringing [interest rates] down on the lending side.

"If there is a recession, however, we can bring rates down further if there is no major wage increase. If there is a recession and a major wage increase, it would be very difficult to do that – otherwise you would be racking up demand in a situation the economy is not able to sustain," the Central Bank boss pointed.

Williams also touched on the issue of Government's removal of the common external tariff (CET) on certain goods, noting that one had to ensure that CET concessions did not render uncompetitive some of the companies producing for the domestic market.

While noting the importance of food security, she said Barbados had to be careful to keep production costs low or run the risk of losing the advantages gained by improved domestic production. (JW)