Ramnarine: Tough time made worse

Former energy minister Kevin Ramnarine on Tuesday argued that the economic challenges facing TT have been made worse by the covid19 pandemic. Ramnarine made this comment in reference to new measures announced by the Prime Minister on Monday after a special Cabinet meeting at the Diplomatic Centre in St Ann's.

One of those measures includes closing TT's borders to non nationals for two weeks, starting from midnight on Tuesday. "Before covid19, I thought TT was going to have a tough time. Now it has been made a lot worse," Ramnarine said.

According to Ramnarine, TT was in a fragile economic situation before covid19 with four years of economic contraction. He believed that covid19 and the measures taken by Government to minimise its spread will have a negative impact on the economy. "TT being an exporter of energy commodities is more economically vulnerable that other countries," Ramnarine said.

He said the first obvious impact is the fall in oil, gas and methanol prices. Ramnarine observed on Monday that oil prices slipped below US$30 per barrel. " That is the lowest in four years. Lower prices for these commodities means lower government revenue."

He said Finance Minister Colm Imbert should further revise his revision he made for government revenues last week. Imbert last week estimated that TT's could suffer a shortfall of $3.5 billion in revenue as a result of efforts to deal with the spread of covid19 and the Russia-Saudi Arabia oil price war. On Monday, Imbert estimated the revenue shortfall could reach $5 billion.

"I think the Prime Minister made the case for the use of the HSF (Heritage and Stabilisation Fund) I think that will come," Ramnarine said. He did not foresee any impact on domestic natural gas production in the short term. But Ramnarine was concerned that if the covid19 situation continues beyond three months, there could start to be concerns about the disruption of supply chains for critical equipment and parts.

He said, "The same applies for Point Lisas where supply chains are needed to support maintenance and turnaround activity." In terms of the wider economy, Ramnarine was concerned about the impact of covid19 on the manufacturing sector and small and medium enterprises.

He said the wider economy, outside of the energy sector, could be affected by inflation "stoked at first by panic buying and then by the disruption of supply chains. Ramnarine also said a decline in tourist arrivals will affect hotels, restaurants and demand for food. "This will be particularly devastating for the Tobago economy."