When Finance Minister Colm Imbert presented the Mid-term Budget Review yesterday, he sought to dispel concerns that the economy has not been performing and that the Government’s borrowing has been getting worse.
The presentation was positive and upbeat, perhaps a spinoff from the Energy Minister’s recent interview on CNN in which he painted a brighter picture of what is happening in T&T with the expectation of increased oil and gas revenue.
Minister Imbert told citizens that the T&T economy, ravaged as it was by the impact of COVID-19, was finally rising again out of the slump.
Minister Imbert promised that part of the surplus from the sale of petroleum fuels will be used to subsidise the price of LPG (cooking gas) for the rest of the fiscal year. This is good news for the public, given that only recently, the price of fuel at the pumps went up and there were fears the price of LPG would also have eventually been increased.
It was not the only bit of heartening news, as Minister Imbert promised that based on increased revenues from higher oil prices, Government had agreed to pay out VAT refunds to businesses in the sum of $1.7 billion.
Minister Imbert expects that the payments being made at this time will not just keep business operations afloat but will serve to stimulate the economy and help businesses in maintaining employment.
The Finance Minister also declared that petrochemical companies are proving to be “a life jacket for Trinidad, because of the increased price of petrochemical products.” The boost from the petrochemical sector, the Minister said, was to the tune of $1.7 billion.
Of that figure, $570 million will go to subsidise cooking gas and $600 million will be used to deal with arrears for rent, water, electricity, telephone, janitorial and security services owed by various Government ministries.
In fact, the economy performed so much better than forecasted in last year’s budget, that Minister Imbert noted Government will also be able to make a contribution back to the Heritage Stabilisation Fund (HSF).
With the rosy picture painted of an economy on the upswing, Imbert made a point to not forget current negotiations between trade unions and the Chief Personnel Officer, saying additional revenue earned will be applied to increased wages for public servants.
The overall picture of improvements to roads, infrastructure, a reduction in public debt, which Imbert said is now $800 million less than before and a reduction in borrowing, certainly painted a picture that the economy is considerably better at this point.
Unfortunately, the sad reality is that while more oil and gas dollars than initially expected are rolling in, the high level of crime, poverty and general fall in the standard of living for some citizens remain real issues which can take away from any economic benefit which may accrue from the activity detailed yesterday.
In February when Russia invaded the Ukraine, the price of oil surged past US$100 per barrel. Yesterday, oil was pegged at US$113 a barrel, but there was a warning that failure to implement a ban on Russian exports to the European Union could send oil crashing to US$65.
This newspaper fully understands that the trickle-down effects of the windfall being experienced will not be felt by the average citizen almost immediately. However, we also believe that the Finance Minister needs to adopt a more cautious approach, even while trying to instil confidence in the population, lest there is a change in fortunes and some of the promises he made yesterday cannot be realised.