Tighten Your Belt...The Continuation

As we, Trinbagonians, are on the eve of the 2017-2018 fiscal budget, which is carded for Monday 2nd October 2017, it is imperative that we prepare ourselves for what may potentially be in our future. According to the Bourse Report, the following occurred during the 2016-2017 fiscal year. It can be broken down into two major sections: Revenue Expenditure On the revenue side of the equation…. GDP Growth SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO In 2014 and 2015 GDP growth was -0.6%, which further increased negatively t0 -2.3% in 2016. The IMF (International Monetary Fund) expects for 2017, that there will be a positive GDP growth of 0.3% due to an increase in production in the energy sector with regards to natural gas and relative production stabilization within the oil industry. Energy Sector Contribution to GDP In 2012, the petroleum sector accounted 41% of GDP (approximately $60.5 billion). In 2016, the sector generated around $27.5 billion dollars or 19% of GDP fortune. The non-energy sector contributions would have remained relatively constant over the years. SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO Decreased Revenue Lower levels of production mean that less energy commodities can be manufactured and exported, therefore generating less revenue. The Government Total Revenue in 2012 was $47.1 billion dollars, where 29 915 000 barrels per day were being produced, in comparison to $41.7 billion in 2016 (26 164 000 barrels were produced per day). Total Revenue is directly proportional to the Energy Revenue which stems from the amount of crude oil being produced, and by extension, natural gas as well. SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO On the expenditure end… Increased expenditure. SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO In 2015, central government expenditure stood at TT$ 31.8 billion and it increased by 1.8% (TT$ 0.4 billion) to TT$ 32.2 billion in 2016. There were not much changes to the composition of the total expenditure, and it must me noted that Transfers & Subsidies usually account for roughly 50% of all government expenditure. Increase in Fiscal Deficit. A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. In 2016, there was decrease in revenue and an increase in expenditure. This meant that there was an increase in the fiscal deficit by TT$ 3.9 billion, from TT$ -5.5 billion in 2015, to TT$ -9.4 billion in 2016. SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO Increase in Debt-to-GDP Ratio. The debt-to-GDP ratio is the ratio of a country's public debt to its gross domestic product (GDP). By comparing what a country owes to what it produces, the debt-to-GDP ratio indicates the country's ability to pay back its debt. A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt. A high debt-to-GDP ratio means that an economy does not sufficiently produce and sell goods and services to pay back debts without incurring further debt. The total Debt-to-GDP Ratio increased from 58% in 2015 to 61.5% in 2017. SOURCE: CENTRAL BANK OF TRINIDAD & TOBAGO What Can We Expect in the Upcoming 2017-2018 Fiscal Budget? It is safe to say that many changes are necessary in order to cope with our current economic climate, as well as prepare for what’s in store for us in the future. We can expect further job cuts, removal/amendments of certain transfers (e.g. GATE) and subsidies (gasoline and electricity), increase in taxes and possible implementation of the rumored property tax. In an address to the nation today at the “Spotlight on Trinidad and Tobago’s Financial Circumstances: The Road Ahead” conference, Prime Minister Dr Keith Rowley stated that: “We have to trigger growth process in the economy. The basic strategy is getting the private sector involved in targeted industries: export, manufacturing, tourism, housing, maritime services, agriculture, financial services and creative industries.” What do you, as a citizen of Trinidad and Tobago, expect out of the upcoming 2017-2018 Fiscal Budget? Stay tuned for the subsequent Post-Budget analysis coming to you, next week.




eNRgyTT'S View

Extra eNRgy

eNRgy Alphabet

About Us


Contact Us

  • youtube
  • instagram-sketched
  • twitter
  • facebook

Join our mailing list!

Never miss an update!