PM reveals true state of economy –– Trinidad and Tobago in $4.4b hole

PRIME MINISTER Kamla Persad-Bissessar says her government has inherited a $4.42 billion "hole" which needs to be filled in order to keep the country running. She pledged her government will find the money to do so.

Speaking at the first post-cabinet press briefing at the Red House on May 8, Persad-Bissessar said her government had been examining the country's true financial state after being elected on April 28 and ministers and parliamentary secretaries were sworn in on May 3.

She said the most important consideration was the country’s month-to-month cash flow which gives an estimated update of the government’s immediate status by month.

“In April 2025, total cash inflow was estimated at $3.95 billion, and total cash outflow was estimated at $5.28 billion. This left a cash deficit of $1.33 billion, which was met from the Central Bank's available overdraft cash balance. By the end of April, the available overdraft cash balance was $3.67 billion, of which $2.74 billion was carried forward to May 2025,” she revealed.

She said there was an outstanding balance of unpaid cheques in the system valued $500 million, which was also carried forward to May.

The PM said cash inflows for May from various sources of government revenue are estimated at $2.38 billion, with an estimated cash outflow of $6.3 billion, resulting in a cash deficit position of $3.92 billion.

“Worse, if all the unpaid cheques in the system were presented for payment, this would add a further $500 million to the deficit for the month – a total deficit then of $4.42 billion for which the Ministry of Finance will need to find funding.

“This is a delicate situation because it means the country was being run month to month, literally living on the overdraft at the Central Bank, which we will now have to max out to meet only part of the deficit in May.”

She said she was told the expected deficit for 2025 would be approximately $11 billion.

The PM outlined the measures by which government intends to fund the deficit.

"We will draw down the remaining $2.7 billion of the available overdraft at the Central Bank. We will refinance a minimum of 60 per cent of the treasury bills due in May, which will free up $647.7 million to address part of the deficit. While it is estimated that 60 per cent will be used, it is more practical to refinance the entirety of the $1.1 billion in treasury bills to leave some breathing space with the balance in the overdraft.

“We will utilise the HSF (Heritage and Stabilisation Fund) available balance of $1.76 billion to be drawn down for the rest of the fiscal year 2025 and additional borrowing of a minimum of $1 billion.”

Persad-Bissessar said the most recent tax collection data for fiscal 2025 up to March showed that from October 2024 to March 2025, total fiscal collections were $17.563 billion.
She said the permanent secretary in the Ministry of Finance had been asked to provide a revised projection of revenues in the short and medium term.

“Given the high levels of deficit and debt, this is likely to adversely affect the ratings from the credit rating agencies.”

Persad-Bissessar said talks would continue with Grenada, Suriname and Guyana regarding energy deals. She said cabinet had agreed to scrap the TT Revenue Authority, citing concerns about possible overreach by the finance minister, as well as citizen’s rights to privacy.

She said government will be exploring strengthening the Board of Inland Revenue by: increasing the number of commissioners, including non-public officers as commissioners, as this would allow for greater expertise to be included in the BIR’s governance of the Inland Revenue Division; introducing regulations to mandate the BIR to hold monthly board meetings; addressing all outstanding staffing needs and ensure that the Inland Revenue Division is up to the full complement of staff; and developing a comprehensive audit plan, among others.

She said the government would also scrap the demerit point system currently imposed on errant motorists in addition to whatever charges/tickets are issued by police/licensing officers.

She said she has instructed Finance Minister Davendranath Tancoo to find funds to ensure children entering school in the new term in September would receive laptops.

Persad-Bissessar said government intends to redirect funds being used to provide people with state-funded security, both police and private, towards the fight against crime, except where needed.

She said she has requested a listing of government officials being supplied with state-funded housing in order to cut costs.

“I have directed to stop all requests for state-funded housing for my cabinet members. The country is not that big; they can drive to work from their homes.

“I have also directed that an assessment be done to cap the maximum price on vehicles that parliamentarians can purchase using their tax breaks.”

Asked about the promised salary increases in light of the economic reality she had shared, Persad-Bissessar said the government would find the money and make it happen. Asked when, she said it has only been a week that her government has been in charge.

“I’ve come here and shared how many promises we’ve already kept. Have some faith, we will make it happen. We have the plans.”

ROWLEY LASHES OUT

Former prime minister Dr Keith Rowley, who led the PNM government from 2015 to March 17, this year, when he resigned and then energy minister Stuart Young was appointed prime minister, was asked for a response on the state of the economy. He gave a response via a WhatsApp message.

"If I have a comment? Have you ever paid any attention to the state’s earning capacity as oil and gas prices and production levels have been steadily declining since 2023?

"Where were you and her (Persad-Bissessar) for the last month when there was an election campaign? On one side you had the PNM government telling the country about our struggles and challenges on the revenue side and how we have an ongoing fight to fund the expenses of government.

"Yet on the other side you had these UNC clowns playing to the gallery saying the UNC will spend more from less and everybody will 'win'.

"Now you are asking me for a comment! So you ignored everything I said during the election campaign?"

Rowley said Newsday was now talking to the wrong person.

"I have already spoken. You need to be talking to the UNC managers of the country about how they will carry out their inducements, now that the elections are over and their deception has worked. Everything was made to look easy and would all fall into place once the government was removed. Mission accomplished, now it’s time to deliver...so you are talking to the wrong people."

He claimed that the PNM was the only party who ran an election campaign based on truth.

"We kept saying to the population that we can’t afford significant expenditure increases. It didn’t sound good during an election campaign but it was a truth that the population needed to know. The UNC response was, who cares. Now this!

"So you went to Massy, picked up a trolley, strolled around the aisles, load it to the ceiling. You then turn up at the cashier, only then you reach for you wallet to see if there is any money in the wallet. What do you call that?"

Rowley said such a person in Massy would be described by others with a lot of names – none complimentary.

"The only real trouble is that you are already in the office of the Prime Minister.

"Btw, in detailing the danger of buying what they were selling, I went as far as to caution about the spectre of an IMF exposure if we are not careful. Did you hear any of that?"