The International Monetary Fund (IMF) has indicated a recovery of the local economy and projected growth of just over three per cent this year.
The IMF yesterday released the concluding statement of its two-week 2023 Article IV Mission to Trinidad and Tobago.
It is a yearly health-check by international experts of Trinidad and Tobago’s economy and finances.
“The concluding statement points to the ongoing broad-based recovery of the economy, with a projected growth for 2023 at 3.2 per cent (following 2.5 per cent in 2022), even higher than the Government’s own projections for growth,” the Ministry of Finance said in a release on the IMF’s concluding statement.
Finance Minister Colm Imbert said: “Such positive outlook is notable given the complicated international economic context.”
He added: “The IMF ‘welcomes’ our prudent management of public finances, views as ‘appropriate’ the current public expenditure envelope, and encourages us to continue building buffers in the Heritage and Stabilisation Fund. Our medium-term commitments to fiscal rectitude are also deemed ‘prudent and welcome’.”
Public sector debt at 71 per cent
Overall, the public debt trajectory is expected to be broadly stable until 2028, notwithstanding materially more pessimistic oil and gas price projections, the Ministry noted in the IMF’s statement.
The IMF’s headline central government debt/GDP metric puts Trinidad and Tobago’s Central Government debt at 53.8 per cent of GDP for 2022, and 53.9 per cent in 2023.
“Trinidad and Tobago’s more conservative approach to the quantification of country debt, namely Public Sector Debt which, in addition to Central Government debt, includes a considerable amount of Government-guaranteed debt, has also stabilised at 71 per cent according to the IMF, after a significant decline from post-Covid heights, and is now well below other Caricom and LATAM countries,” the statement said.
“The IMF’s acknowledgment of the prudence, resilience and medium-term orientation of our fiscal policy is indeed gratifying, coming as it does after the multiple shocks faced by Trinidad and Tobago and the world economy over the last three years,” Imbert stated.
The IMF has encouraged us to continue “maintaining sound and consistent policies to support our current exchange rate arrangements” while acknowledging the need to balance growth and price stability objectives.
Lastly, the IMF points to the need to “step up efforts” to diversify our economy, the Ministry statement said.
“The IMF’s guidance and encouragement are very useful and timely,” said Imbert. “It is our intention indeed to accelerate our diversification efforts, and build on the foundation we have laid of sound fiscal and financial policies.”