Jun 2016 Financial News

IMF: Energy challenge for country’s economy

Jun 22, 2016

The International Monetary Fund (IMF), in its report on the 2016 Article IV Consultation with T&T release on Monday, said the recent sharp decline in global energy prices is posing major challenges for the country’s economy.

According to a media release from the Ministry of Finance, the Executive Board of the IMF is however commending Government’s efforts at fiscal consolidation. The board, which comprises representatives of all member countries/constituencies of the IMF, encouraged further policy actions, including structural reforms to preserve macro-economic stability, diversify the economy and enhance medium growth prospects.

The release continued: “The IMF Directors agreed with the medium-term plan of the present Government which focuses on broadening the revenue base through comprehensive VAT reform, improving tax administration and conserving expenditure, while improving targeted social protection. The directors encouraged the authorities to put in place a comprehensive fiscal framework to guide their multi-year adjustment.

“The IMF directors also supported the current pause in monetary policy tightening given the challenges to growth. While agreeing that addressing foreign exchange shortages for current transactions would be important, directors underscored the need for a well-communicated move to greater exchange rate flexibility to strengthen the foreign exchange market and support the needed macroeconomic adjustment.”

The IMF officials underscored the need for pushing ahead with energy sector taxation reforms, addressing inefficiencies in the public service, and strengthening financial sector supervision and regulation, the Finance Ministry reported.

“They also applauded efforts of the present Government to further strengthen the Anti-Money Laundering and Counter Terrorist Financing (AML/CTF) Framework.

“Finally, the IMF directors encouraged continued efforts by the Government to improve the business climate, to establish of a tax policy unit and National Statistical Institute.”

Source:
Trinidad Guardian
Wednesday, June 22, 2016

http://www.guardian.co.tt/business/2016-06-22/imf-energy-challenge-country%E2%80%99s-economy