Government wants to increase borrowing limit by $10b

FINANCE Minister Colm Imbert said Government’s continuous good management of public debt was one of the reasons why the International Monetary Fund (IMF) said the economy is undergoing a sustained recovery.

Imbert opened debate on a motion in the House of Representatives on March 15 to increase the statutory limit of borrowings under the Developmental Loans Act from $65 to $75 billion.

Imbert told MPs that events such as the covid19 pandemic and its associated global economic recession and the Russia-Ukraine war created a situation where all countries had to engage in borrowing to stimulate their economies and protect their most vulnerable people. As a result, he continued, the public debt of many countries has increased.

In 2020 (the year the pandemic began), Imbert said the debt was approximately 81.5 per cent of GDP (Gross Domestic Product) and was trending upwards. He told MPs that because of Government’s prudent fiscal management, “our debt levels have gradually decreased standing at 70.8 per cent of GDP as of today.”

Imbert added that Trinidad and Tobago’s public sector debt to GDP ratio is lower than several other Caricom countries such as Barbados, Antigua & Barbuda, Jamaica, Suriname, St Lucia, the Bahamas, Dominica and St Vincent and the Grenadines. Since 2021, Imbert said Government’s borrowing to support the economy has averaged approximately $3 billion annually.

“In fiscal 2024, thus far, we have borrowed to finance approximately 60 per cent of this year’s deficit, leaving a headroom of just $2.5 billion left under the Developmental Loans Act.” Imbert said the majority of the government’s borrowings were done through this legislation.

“We are able to lock in more favourable rates and reduce our borrowings’ cost using this act, in contrast to the other acts, as we borrow in TT dollars.” He said a government’s ability to borrow money can help to stimulate an economy through expenditure on developmental projects, provide protection for the most vulnerable in society and offer protection against unforeseen macroeconomic shocks.

Government MPs thumped their desks when Imbert said, “This government has never defaulted on any of our debt obligations. We continue to service all of our payments on time.” He also claimed the Opposition believed the purpose of the motion was to add $10 billion to the 2023/2024 budget.

Imbert said this was not so because the budget was already set. Earlier in the sitting, Imbert answered questions from the Opposition about debt. He said for the quarter ended December 31, 2023, total central government external debt was US$5.1 billion. Total external debt for state enterprises and state agencies was US$2.105 billion and the total debt to GDP ratio was 70.8 per cent, he said.

Concerning interest paid on the external debt for fiscal 2022/2023, Imbert said that figure was $1.512 billion. He added that the percentage of revenue earned by Government that went towards repayment of interest on this debt was three per cent.

In response to a separate question about a forensic analysis of the National Insurance Board’s (NIB) confidential and personal data after a cyber-attack on December 26, 2023, Imbert said the NIB has reported that “the critical systems that contained personal data were not impacted by the attack.” He added. “There is no evidence of data ex-filtration from the NIB. As such, the NIB’s personal data retains its integrity.”