Finance Minister Colm Imbert says “not a dollar” has yet been withdrawn from the Heritage and Stabilisation, which contains US$6.1 billion. However, he says drawdowns will be made from the fund “only as and when required, and not arbitrarily or by vaps.”
Apart from last September’s decline in natural gas prices and the subsequent unprecedented collapse of oil prices, he said the global economic shutdown resulting from COVID-19 also depressed demand for oil, causing the recent oil price crash.
“This crisis is global in scale and scope and the outlook is subject to extremely high uncertainty in the context of its unfolding character. With over 3 million confirmed cases of the virus worldwide and over 200,000 deaths thus far, no one can really say for certain what next month will bring,” Imbert said during yesterday’s parliament sitting.
He said T&T was confronting a crisis “the likes of which we’ve never seen”.
Noting various oil price projections for June and other predictions, he said such forecasts are “exceedingly problematic at this time”.
As a result and with the consequent erosion of T&T’s oil and gas tax revenue base, plus as the social support for citizens, Imbert said T&T’s economic and fiscal outlook and Budget is being recalibrated. The 2020 Budget was based on an oil price of US$60 and a gas price of $3.00
He said the global economy is projected by the International Monetary Fund to contract sharply by at least 3.0 per cent in 2020, much worse than during the 2008-2009 financial crisis and there’s also extreme uncertainty about the global growth forecast.
“The economic fallout is affected by factors which interact in ways that are hard to predict, such as spread of the virus, the intensity and efficacy of containment efforts, extent of supply disruptions, the repercussions of the dramatic tightening in global financial market conditions, shifts in spending patterns, behavioural changes, such as people avoiding shopping malls and public transportation, social distancing, confidence effects,” Imbert said.
“For us in Trinidad and Tobago, we’re profoundly affected by volatile commodity prices. The impact on Trinidad and Tobago isn’t different to any other country.”
But he said Government’s working with multilateral institutions while focusing on domestic solutions.
“We’ve rapidly ramped up how to deliver support in the face of a national shutdown. We already have a better understanding of the challenges, risks and trade-offs which we will face as we gradually restart our economies.”
He detailed international financial assistance to address the unprecedented financial demands of COVID-19: US$300m (TT$2b) from various multilateral agencies plus a further US$500m (TT$3.4b) and TT$500m being raised locally to pay for increased health sector needs.
Imbert said a plan for recovery from the virus’ economic effects is being handled in another forum. “We’re confident the Road Map Committee will bring a degree of certainty to the shaping of our future. We’ve faced challenges in the past and survived. With the help of all citizens and Almighty God, we’ll do so again on this occasion,” he said.