Peter Christopher
Senior multimedia reporter
peter.christopher@guardian.co.tt
Reporting from Washington DC
Central Bank Governor Dr Alvin Hilaire says Trinidad and Tobago is well placed to avert the problem of rising debt levels, even as that issued was redflagged as a global concern at this week's International Monetary Fund (IMF) meetings in Washington DC.
"Trinidad and Tobago, Of course, we do have a burgeoning global debt problem. Because many countries have increased their debt in the wake of the pandemic, to deal with vaccines, to deal with public health issues, to deal with social support. So their debt has gone up and in a context where interest rates were very high. So good news all over. But I think with the geopolitics that we have in the Middle East, with Ukraine, with all elections, we have to be very, very careful and vigilant," said Hilaire in an interview with Guardian Media at the IMF Headquarters
Director of the Fiscal Affairs Department, Vitor Gaspar, warned that global debt to GDP ratios could top 100 per cent by the end of the decade as he presented the analysis of the IMF Fiscal Monitor report at a press briefing on Wednesday.
Hilaire is part of T&T's contingent at the IMF's annual meeting. He confirmed that he took part in several meetings, including the G24 meeting which took place in Washington on Tuesday.
He said while Gaspar had valid concerns about global debt, alarm bells should not be sounded for T&T just yet.
"I think Trinidad and Tobago is in the fortunate position in that when we entered the pandemic, we had some important buffers. One, we have good reserves. Two, we had a strong Heritage and Stabilisation Fund. And three, we had fairly low debt, so that the Government and the Central Bank were able to provide fiscal support, monetary support, without an increase in in debt too much, because we were able to draw down on those buffers."
According to the 2024 Review of the Economy, which was one of the 2025 budget documents, T&T's government debt totalled $100.23 billion as at September 30, 2019, the end of the 2019 financial year.
T&T's debt to GDP ratio in 2019 was 61.9 per cent.
The provisional estimate of the T&T Government debt at the end of the 2024 financial year $140.58 billion, according to the 2024 Review of the Economy. That was an increase of 40 per cent in the six-year period.
However, the provisional estimate of T&T's debt to GDP at the end of the 2024 financial year was 75.6 per cent.
T&T's domestic debt increased from $72.91 billion in 2019 to an estimated $103.84 billion at the end of the 2024 financial year on September 30, an increase of 42.4 per cent.
The country's foreign debt (in TT dollars) increased from $$27.32 billion in 2019 to an estimated $36.73 billion in 2024. That's an increase of 34.4 per cent.
The estimated debt of $140.58 billion in as at September 30, 2024 comprised central government domestic debt of $73.99 billion, central government external debt of $36.73 billion and non-self serviced government guaranteed debt of $29.84 billion.
Hilaire stressed that the government would have to be careful with its economic policy to avoid sinking into problematic debt.
"So again, I think we are in a fairly decent place, but vigilance is the key, because if you don't have important reforms, then things could go out the window," said the Central Bank Governor.
