IMBERT RAIDS RAINY DAY FUND

FINANCE Minister Colm Imbert has withdrawn the net sum of an astounding US $2.3 billion (about TT $15.7 billion) from the Heritage and Stabilisation Fund (HSF).

Since returning to national office in 2015, the administration of Dr. Keith Rowley has taken out US $2.6 billion (TT $17.6 billion) from the rainy day fund.

The first withdrawal was in June 2016.

The Government made two deposits, both in 2022, of a total of US $346,000 (TT $2.31 billion).

Imbert said earlier this year that the HSF has a net asset value of US $5.39 billion.

The fund has been boosted by the returns of its international investments.

Despite those earnings, the HSF is lower than its worth of US $5.66 million in September 2015.

The fund grew by US $2.03 billion from 2010 to 2015.

The continuous withdrawals from the sovereign fund tie in with the lowest foreign reserves in 17 years, a gaping deficit budget, and the increasing prospect of dark economic times ahead.

The expected hard times could be similar to that of the 1980s when there was a comparable dramatic economic decline.

The country’s leaders went to the International Monetary Fund (IMF).

The minister has already raised the troubling prospect of being unable to maintain “current levels of subsidies, grants, free services, and social programmes.”

Poor people would be more harshly affected by these cutbacks.

Imbert has also admitted that international credit rating agencies have warned that if the Government does not balance its books soon, “the country’s international credit rating will be downgraded.”

He conceded that “the next three years will be very challenging for the country from a revenue perspective.”

That means the continued inability to match spending with revenue.

Imbert is anxious to stop dipping into the HSF and going to lending agencies with the begging bowl.

But there are no immediate alternative sources of revenue, and economic experts anticipate that the minister will soon withdraw more funds from the HSF.

In the absence of diversification away from the flagging energy sector to create new sources of foreign exchange, Imbert is seeking to spread the tax net through the Revenue Authority.

His ministry is busily transferring public officers to the Authority even though the issue is tied up in court.

The Property Tax will also deliver much-needed revenue to the national coffers.

Of Imbert’s nine budgets, only the 2022-23 package had a surplus.

That was the result of higher energy prices caused by the Russian-Ukrainian war.

That led to the two deposits into the HSF.

Imbert borrowed heavily and raided the HSF to finance the shortfalls in the other eight budgets.

An economic expert summed up the national financial scenario with the terse comment: “Our nation is on the brink of economic collapse.”

It is likely that the minister would return to the rainy day fund and the international market to raise funds to cover the 2024-25 budget deficit.

Economists have warned that T&T’s debt is in a “danger zone”

The HSF was set up in March 2007 to save excess energy revenue for hard times.