May 2012 Financial News

IMF predicts: TT’s small deficit this year

May 23, 2012

Trinidad and Tobago’s non-energy sector actually reported more growth last year than the energy sector, and is projected to do the same again this year.

This was the finding of the International Monetary Fund’s (IMF) Mission Chief for Trinidad and Tobago, Judith Gold, during her presentation yesterday, entitled “The IMF Outlook for TT”.

“When we say the economy is recovering, it’s actually more true for the non-energy sector. While we’re very positive about the prospects for this year, the uncertainty is related to the energy sector. There are issues there related to maintenance, stoppages and such that are very difficult to project, and that are pulling the overall performance down,” Gold stated.

The IMF Mission Chief was speaking at RBC Royal Bank’s seminar, “The TT Economy: Risks, Opportunities and Outlook”, held at Hyatt Regency on Wrightson Road, Port-of-Spain.

Gold made a brief remark about TT being likely to experience “a small deficit this year”; in relation to the fiscal balance, but she did not elaborate on it.

Compare this to her growth projection from a little over three months ago during the IMF’s Article IV Consultations on the local economy in 2011.

During a press conference on February 10 last in PoS, Gold said, “there is concrete evidence that the economy is turning the corner, and that economic growth will resume in 2012, notwithstanding the ongoing technical disruptions in the energy sector. Real economic activity is projected to increase by 1.7 percent in 2012.”

Addressing those gathered in the hotel’s Ballroom yesterday, Gold spoke of the need for certain medium and long-term economic strategies.

“Once the economy is well on the road to recovery, we think the Government has to (adopt) a different fiscal framework. One where they have ongoing surpluses to prepare for the future...when energy reserves are reduced,” Gold stated.

She explained that TT has to begin building its savings now, if it is to prepare for reduced energy revenues. Otherwise, Gold warned, “you will have to make too dramatic of an adjustment” in budgetary and economic policies.


Source:
By Sasha Harrinanan
Newsday
Wednesday May 23, 2012

http://www.newsday.co.tt/business/0,160573.html