BRIAN Manning, Minister in the Ministry of Finance, has described the over $1 billion surplus reported by the ministry as "a huge landmark occasion for our economy."
On Friday, the ministry reported revenues of $54.21 billion for fiscal 2022, almost $11 billion more than originally estimated, resulting in a surplus of approximately $1.08 billion, its first in 14 years, it said in a statement.
"We were on schedule to have a surplus by the year 2022 and because of all the unforeseen challenges that we're seeing in the economy, that was actually pushed back. So we're now ahead of schedule in terms of balancing our budget," Manning told Sunday Newsday on Saturday.
The Ministry of Finance said that some $150 million will be used for a programme to bring disaster relief and begin infrastructure work as announced by the Prime Minister on Thursday.
According to the statement, Finance Minister Colm Imbert said the ministry's finance division has reported that with "various ministries and departments continuing to complete their accounting of the actual expenditure in fiscal 2022 – as opposed to the estimated expenditure published in the 2023 budget documents – it has turned out that the total expenditure for fiscal 2022 was less than originally estimated, thus improving the fiscal balance."
Imbert said, "As is the norm, the Budget Division ... is continuing its work towards the final reconciliation of income and expenditure for fiscal 2022, which is a statutory requirement for the closing of the accounts for fiscal 2022."
The final accounts for fiscal 2022 must be reported to Parliament by the end of January.
Imbert said, "(It has) been established that rather than achieving a small deficit of $300 million or -0.2 per cent of GDP (gross domestic product) in fiscal 2022, the ministry has in fact achieved a fiscal surplus in 2022."
While total revenue rose by $10.88 billion more than projected, total expenditure was revised down to $53.12 billion, over $690 million more than originally estimated at the beginning of fiscal 2022.
Imbert said there may be still be another $100 million in expenditure in 2022 that is still to be brought to account.
"It should be noted that the original budgetary estimates for fiscal 2022 were total revenue of $43.33 billion and total expenditure of $52.43 billion, which led to an originally anticipated deficit of $9.1 billion or -6.0 per cent of GDP at the time.
"Taking into account the additional $100 million in expenditure that may be brought to account in due course, the provisional outturn for fiscal 2022, instead of a deficit, is therefore a fiscal surplus of $1.08 billion, or 0.6% of GDP
"This improved outturn for fiscal 2022," Imbert said, "has given the Government the additional fiscal space to implement the $150 million programme of disaster relief and infrastructure work announced by the Office of the Prime Minister," said Imbert.
In a previous statement in October, Imbert said the ministry had achieved an almost balanced budget when revised figures then placed revenue at the same $54.21 billion but expenditure was 54.54 billion.
Manning explained how TT got to this point.
"As you would know, we've been running budget deficits since the global financial crisis of 2008. TT has been having a very difficult time.
"Where global economic activity is diminished, the demand for energy is also diminished, so that has made things difficult for our economy."
Manning described the drastic decline in energy prices from 2014 to 2016, reportedly the lowest since World War II, as "an extreme event in the energy and global economy."
He said, "And then, of course, we were faced with the pandemic of 2020. Meanwhile, the invasion of Ukraine by Russia, earlier this year, has had many global implications, not least a worldwide increase in fuel prices.
"We've been trying to be reasonable in terms of managing our economy by, one, cutting our expenses, but also pumping enough money into the economy to ensure there is still growth and TT is still a viable economy."
"It has been very difficult. But I am proud to say, while we were stabilising our economy, there were no massive (public sector) layoffs, there was no severe economic turmoil, and mostly jobs remained in tact," Manning said, adding that social services have also seen to the needs of the vulnerable.
"This surplus here is fortuitous but it is also a sign of fiscal planning."
How the balance will be appropriated, he said, will be determined by Cabinet.
"We will decide in the next budget, maybe in the mid-year review exactly what to do with it. Of course, the funds have to be earned before they can be spent.
"I would expect that quite a bit would be spent on stimulating our economy but also in terms of dealing with some of the infrastructural issues that we have, especially with the level of flooding we've experienced this rainy season.
"That has made things quite difficult in terms of infrastructural work and road paving and other such projects that we would have loved to have engaged in within that time."