Consider IMF recommendations

Finance Minister Colm Imbert welcomed the cautiously positive tone of the IMF's 2023 Article IV mission to TT a week ago, noting that, "The IMF's guidance and encouragement are very useful and timely."

The 20 points noted by the International Monetary Fund are generally positive about the government's handling of the fiscal surplus that resulted from rising oil and gas prices in the wake of the Russian invasion of Ukraine.

Mr Imbert noted the IMF's prediction of a medium-term expansion of GDP by 3.2 per cent, but did not comment on its caution that growth is also projected to slow down to 1.5 per cent as TT faces the reality of maturing oil and gas fields.

Any additional revenue from Venezuela's Dragon gas field is still years away.

The IMF has also warned that budget deficits will widen as public-sector wage negotiations continue, while issues with the precarious state of the National Insurance System and the impact of a global reduction in fossil-fuel use threaten the country's economic balance.

Mr Imbert's spirited defence of the foreign-exchange rate despite the IMF's recommendation for more exchange-rate flexibility and the implementation of a more efficient foreign-exchange infrastructure suggests they are unlikely to change. The real-world exchange rate is usually to be found in the shadow economy for US currency.

The mission report also signals across three separate notes the need to use current petrochemical strength to transition the country to cleaner energy generation while developing sustainable diversification initiatives.

TT must move more aggressively to become a producer of goods, not just a distributor.

Many of these concerns were also raised at the UNDP global economic seminar on March 2.

Central Bank Governor Dr Alvin Hilaire noted then that while TT is well integrated globally and the bank had managed to avoid the severe shocks that had buffeted global supply and fiscal shocks, the country faces "a vicious fight for market share" among nations that are adjusting to the changes in the world's marketplace.

Both Dr Hilaire and ANSA Merchant Bank managing director Gregory Hill agreed that the only successful path to sustainability will be a serious national focus on economic diversification.

Mr Hill suggested some movement in that regard, explaining that while energy revenues held steady at between $25 and $27 billion annually between 2019 and 2023, non-energy revenues have increased from $7 billion to more than $29 billion.

But it isn't clear what's caused the dramatic shift.

Finding the answers to that, while addressing the continuing challenge of gathering and assessing important information about the country's workings will be the business of the National Statistical Institute.

That initiative has been on hiatus since the bill to create the agency, planned as the replacement of the Central Statistical Office, was read into Hansard in June 2018.

Without accurate and readily available statistics about the country's governance, planning is needlessly hit-and-miss.