The Trinidad and Tobago government Monday reported strong economic indicators for the first half of this year with revenue being estimated at more than TT$706 million (One TT dollar=US$0.16 cents) above what had been budgeted for in the 2019 fiscal package.
“Simply put, sound and stable macroeconomic conditions, in particular low inflation and stable interest rates have laid the foundation on which savings and investment are being generated in an environment of certainty with improving prospects for growth,” Finance Minister Colm Imbert said, as he delivered the Mid-Year Review for fiscal year 2019.
He said the fiscal outturn for the first half of 2019 for the fiscal accounts points strongly in the direction of fiscal sustainability.
“Our 2019 budget was predicated on an oil price of US$65 per barrel and a gas price of US$2.75 MMBtu. Current prices are not deviating significantly from these assumptions. However, global energy prices declined by 17 per cent over the period October 2018 – February 2019, which resulted in a loss of revenue, in particular royalties on oil and supplementary petroleum tax.”
Imbert said that oil prices fell after recording a high of US$70 per barrel in October 2018 to a low of US$49 per barrel in December 2018; but since then prices have recovered to an average of US$63 in April 2019.
He said gas prices are now hovering around US$2.65 per MMBtu; but over the period October 2018 –April 2019, the price was US$3.26 per MMBtu.
“Madam Speaker, revenue in the first half of 2019 was TT$706 million above the programmed revenue estimated in the context of the budgeted $47.72 billion for the year. On the other hand, as a result of our tight cash flow situation, expenditure in the first half of 2019 was $2.55 billion below the programmed expenditure, in the context of the total budgeted for the year of TT$51.77 billion.
“The originally estimated fiscal deficit for 2019 was TT$4.05 billion; but for purposes of administration, with capital revenue programmed for the second half of the year, a deficit of $5.11 billion was programmed for the first six months of the year. However, the actual recorded deficit for the first half of 2019 was only TT$1.85 billion.”
Imbert said that this performance is another indication of the government’s ability to manage the country’s finances prudently and carefully, adding that the “achievement of the stabilization objectives with revenue and expenditure now in broad alignment represents a solid foundation on which transformation and growth would now be anchored”.
Imbert said that the increase in government’s revenue was mainly due to higher than anticipated receipts from taxes on income and profits, international trade, non-tax revenue as well as capital revenue.
He said these increases were partially offset by lower than anticipated receipts from taxes on goods and services, estimated at TT$578 million.