Mar 2017 Financial News

T&T revenue plunges 29% in 1Q

Mar 13, 2017

Government’s revenue for the first quarter of the 2017 fiscal year plunged by nearly 29 per cent to $7.98 billion compared with $11.22 billion in the same period in the previous fiscal year, according to preliminary data in Central Bank’s March Economic Bulletin, which was published on the institution’s website yesterday.

The document indicates that the sharp fall in government revenues for the October to December 2016 period was due to a decline in both energy revenues and non-energy receipts. Non-energy revenue fell by 29.1 per cent to $6.3 billion from $8.3 billion “largely on account of a significant falloff in non-tax revenue.” T&T’s energy revenues declined by $283.4 million, “primarily on account of lower domestic energy sector output,” according to the Economic Bulletin,

As a result of the sharp reduction in government revenue in the three-month period, the deficit between what the government earned and what it spent was close to $2.5 billion during the first quarter of fiscal 2017, which, when annualized, is about 6.4 per cent of T&T’s gross domestic product (GDP).

The comparable deficit in the first quarter of the 2016 fiscal year was $775.1 million (annualized 2.1 per cent of GDP).

In terms of expenditure, total expenditure declined by 12.8 per cent to $7.5 billion in the first three months of fiscal year 2017 as spending on goods and services and transfers and subsidies contracted. Spending on goods and services decreased to $1 billion reflecting Government’s cutback in discretionary spending.

Transfers and subsidies fell by 16.1 per cent to approximately $6.2 billion on account of lower subventions to statutory boards and similar bodies and petroleum subsidy payments. On the other hand, expenditure on wages and salaries grew by $55.9 million to $2.3 billion in the first three months of the 2017 fiscal year.

Expenditure on the capital programme waned by 44 per cent to $325.8 million given administrative delays in project implementation.

The Central Bank also noted sharp declines in the sub-sectors of the local energy sector, with the weakness reflected in contractions in crude oil, natural gas, LNG and petrochemical production.

The report states that there was a year-on-year decline of 7.7 per cent in crude oil output in the second half of calendar 2016 (from July to December) and a 15.4 per cent drop in natural gas production over the same period.

In addition, production of both LNG (liquefied natural gas) and NGLs (natural gas liquids) was down, with LNG output falling by 16 per cent and NGL production by 18 per cent.

Methanol output declined by 23 per cent “as the sector faced several shutdowns,” the Central Bank report stated.

Source:
Trinidad Guardian
Saturday March 11, 2017

http://www.guardian.co.tt/business/2017-03-11/tt-revenue-plunges-29-1q