Secretary of Finance and the Economy in the Tobago House of Assembly (THA) Joel Jack is optimistic that Tobago’s economy will return to growth next year, given the number of development projects expected to continue.
Last month, Jack forecast a 15 per cent slump in gross domestic product (GDP) by year’s end, due to the impact of the Covid-19 pandemic on Tobago’s tourism sector.
Speaking during the THA’s post executive council meeting on Wednesday, he said the Assembly’s projection remains the same.
He noted that in fiscal 2019, Tobago saw a 1.4 per cent increase in GDP, which resulted in growth to $1.77 billion.
“When we crunched the numbers in the first quarter of the calendar year, the economy was poised for continued growth from 2019 into 2020 and the data from the various sectors including tourism pointed towards that. And you might recall that in March the Covid measures were implemented that resulted in a total direct impact on the tourism sector. And we anticipate that this sector will be hit directly. A number of the properties, as you might be aware, are closed at this time and some of the workers are furloughed and we are providing the necessary social sector support directly to the sector,” Jack said. “We have not moved away from our initial estimates of approximately 15 per cent decline in GDP and that is consistent with what is happening around the region and certainly tourism-dependent countries...you look at the United Kingdom, you look at other first world countries with the exception of probably China, we anticipate some economic fallout as a direct result of the Covid-19 pandemic,” he added.
Despite the dismal outlook for the rest of the year, Jack projected a turnaround in 2021.
“When I review the numbers from the IMF (International Monetary Fund) recently, pointing to a five per cent growth in the global economy and 3.4 per cent or so growth in Latin America and the Caribbean...in that context we anticipate return to growth in fiscal 2021,” he said.
“We anticipate a number of construction and other related projects on the island, so we anticipate that fiscal 2021 we would see a return to growth and we would see a reduction in the unemployment figures as well,” Jack added.
The THA received an allocation of $2.134 billion in the 2021 budget, a 6.5 per cent decrease from fiscal 2020 allocation. The THA had requested $4.7 billion.
Jack noted that of the $2.134 billion for Tobago, $1.916 billion is allocated for recurrent expenditure, $200 million for capital expenditure and $18 million for the Unemployment Relief Programme.
He said over the next few weeks, starting with the THA’s retreat this weekend, the Assembly will be recalibrating and re-prioritising its priorities for fiscal 2021.
Meanwhile, Jack congratulated Finance Minister Colm Imbert for presenting a “fairly comprehensive and well grafted” budget statement on Monday.
“I believe we all agree that it was a commendable effort. I believe that some of his critics and naysayers, the kind of austerity budget and some of the hardships that they were looking forward to, many of them were indeed surprised by the presentation as many of these austerity measures did not materialise,” he said.
“And I must say that under the current circumstances and given the deleterious impact of the Covid-19 pandemic on the national economy, coupled with reduced revenues from the oil and gas sector, I think the minister was able to strike a balance, providing the economic stimulus that is required to restore this country to a path to positive growth,” he added.