“Faced with slowdown in economic growth, falling oil production, falling oil prices, stagnation in energy-based expansion,” pointed out economist Gregory McGuire, “the Government in this year’s Budget did not demonstrate, by what is written in the statement, that they took into account the realities of economic life in Trinidad and Tobago (TT).”
Delivering an analysis of the Budget, at the Chamber of Industry and Commerce headquarters in Westmoorings yesterday, McGuire said, “Budget 2009 falls woefully short as a macro-economic plan.” He said Finance Minister Karen Nunez-Tesheira failed to take cognisance of the international economic environment, such as the United States financial crisis. He also criticised the Budget price which was based on revenues from oil at US$70 this year- around US$20 more than last year.
He explained the figure was supposed to be conservative to encourage savings in the Heritage and Stabilization Fund. He cautioned, “Should the oil price in 2009 average US$70 a barrel, no provision would be made for (the Heritage Fund),” and added the Budget reflected that the Government’s priority to save appeared to be residual, with a deposit of 53 percent, instead of 60 percent allocated to the fund. He also said economic growth had been slowing down, and reminded the audience that this year’s growth was estimated at 3.5 percent from a projected seven percent last year.
Senior economist at Republic Bank Limited, Ronald Ramkissoon said, “The 2009 Budget statement sounds a warning in what it says and what it does not say.”
He said he did not see the realism in growth of 3.5 percent with the recurrent revenues and expenditure that was characteristic this year. He also said the Government should rethink the International Financial Centre given the current turmoil in global financial markets. While he acknowledged that capital expenditure was critical for economic development, he warned, “ excessive capital expenditure implies excess recurrent expenditure down the road, it is not easy to budget for high current expenditure.”
Nunez-Tesheira, the feature guest, said the Budget was merely a “continuum” of last year’s budget, and a “report to the people of TT” on the progress of plans that were strategically founded on Vision 2020.
She said petroleum was a commodity that was in high demand and therefore still profitable and pointed out that the Heritage and Stabilization Fund exceeded external debt which was a signal that the Government was saving.