(Trinidad Guardian) The Bankers Association of Trinidad & Tobago (BATT) has noted the optimism by Finance Minister Colm in his 2017/2018 mid-year budget review but said there is still a lot of work to be done to consolidate the gains made and press ahead with restructuring public finances.
The group said in a statement: “The optimistic tone struck in the 2017/2018 mid-year budget review was not at all surprising. It was delivered against a backdrop of improved conditions in the domestic energy sector, with increased gas output and the international price of oil at US$71.36 per barrel (West Texas Intermediate) on the very day the review was delivered.”
BATT said the Government is projecting that the domestic economy will expand within the range of 2 and 2.5 per cent between 2018 and 2020, with the non-energy sector expected to record growth in 2019.
“However, the potential for energy prices to fall during the period represents a significant downside risk to these projections,” it said.
“It is encouraging that the fiscal deficit ($4.2 billion) is expected to be less than initially budgeted ($4.76 billion). Nevertheless, it is still a major cause for concern that this outcome continues to be dependent on extraordinary revenue measures. While government’s efforts to control expenditure is to be applauded, its expressed desire to maintain spending around $50 billion means that unless energy revenues increase significantly, fiscal deficits may continue to be a major feature of public finance for the foreseeable future.”
BATT said from the data presented, it is evident that the economy is performing better, and projections are generally encouraging.
The statement continued: “The country’s emergence from economic decline is still at a fairly fragile stage, and while it can be argued that some progress is indeed being made we must be relentless in our efforts to ensure that the economy is better able to withstand negative external shocks when they occur.
“BATT looks forward to hearing more about measures to position the non-energy sector to play a greater role in driving the economy, and in so doing, provide a more stable foundation for public finance.”
The group advised that Government address structural imbalances which are crucial to improving the competitiveness of T&T’s investment climate.