Presenting the 2025 Mid-Year Review and Supplementary Appropriation Bill to Parliament, Finance Minister Davendranath Tancoo painted a sobering picture of the national economy. He blamed the current financial strain on what he described as years of reckless mismanagement by the previous PNM administration.

Minister Tancoo requested an additional $3.14 billion in funding, explaining that this was not due to unexpected events but rather the result of intentional underbudgeting by the former government. He accused the PNM of creating financial gaps with the expectation that future governments would have to resolve them. He described this approach as fiscal irresponsibility and economic sabotage.

He outlined key economic indicators that have worsened in recent years:

• Government debt increased by 92 percent since 2015, reaching $145 billion.
• External debt more than doubled from US$2 billion to US$5.48 billion.
• The economy contracted by 20 percent overall. The non-energy sector declined by 12 percent while the energy sector fell by over 33 percent.
• Agricultural output dropped by 50 percent.
• Over 60,000 businesses were removed from the company registry and 6,000 additional micro, small, and medium-sized enterprises were forced to close.
• Purchasing power has fallen by up to 50 percent for many citizens due to increased costs for food, healthcare, transportation, and banking services.
• Foreign exchange reserves have been reduced from US$10.5 billion to US$5.3 billion, leaving the country with only 7.5 months of import cover.

The Auditor General’s Report uncovered more than $30 billion in unverified expenditures for 2024. Tancoo said this represented nearly half of the annual national budget and accused the previous administration of attempting to suppress the report to avoid accountability.

In terms of fiscal performance, actual revenue for the first six months of the 2025 fiscal year was $485.5 million lower than projected. Expenditures were also $1.01 billion less than planned. Tancoo stated this was a result of intentional underfunding meant to mask the real financial picture.

He revealed that over $1 billion is owed in arrears for wages, loan repayments, goods, and services, not including outstanding VAT refunds and unpaid contractor bills. These were not accounted for in the previous budget.

The 2025 budget was based on oil prices of US$77.80 per barrel and natural gas at US$3.59 per mmbtu. Revised projections put these at US$66.00 and US$5.00, respectively. This change, along with other factors, is expected to increase the overall fiscal deficit to $9.67 billion, up from the originally projected $5.51 billion.

To manage the increased deficit, the government plans to raise funds through the local capital market, access existing multilateral funding, improve tax collection through the Inland Revenue Division, and reduce unnecessary expenditure.

Minister Tancoo emphasized that the request for $3.14 billion in supplementary funding is not driven by emergencies, but by the need to cover expenses the former administration failed to budget for. He criticized the PNM for spending without proper planning or financing and described their approach as a dangerous pattern of fiscal deception.

Despite these challenges, he expressed optimism for the future and urged the public to remain hopeful. He also announced that Trinidad and Tobago is finalizing a US$15 million loan from CAF to support coastal protection efforts in Tobago.

In his concluding remarks, the finance minister said the past decade under PNM rule was marked by debt, hardship, and decline, which the current government is now working to repair.

Source: (Caribbean News Global)

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