Senator tells government: Explain US$600m decline in reserves

PNM Senator Vishnu Dhanpaul is calling on the government to explain a sharp and unexplained decline in TT's net official reserves, citing data from the Central Bank's Economic Data Pack for September 2025.

According to the report, reserves stood at US$5.093 billion in May 2025. However, by August, that figure had fallen to US$4.6 billion, a decline of nearly US$600 million in just three months.

Speaking at a media briefing at the Opposition's headquarters on Charles Street, Port of Spain, on October 8, Dhanpaul said the data raises serious concerns ahead of the October 13 national budget.

“In November 2024, reserves were US$5.463 billion, and in March 2025, they stood at US$5.272 billion. But the sharp fall began in April. Something changed, and I don’t know what seems to be causing that. But you’re looking at a US$600 million difference from April to August. And you can check it: it’s right there in the Economic Data Pack,” he said.

Dhanpaul warned such a rapid decline in reserves could signal issues with balance of payments stability.

“When you start to have balance of payment issues and a decline in net official reserves, there is only one agency you can call,” he said, implying that the International Monetary Fund (IMF) may become involved if the trend continues.

When pressed to confirm if he was referring to the IMF, Dhanpaul, though hesitant, said yes.

He also criticised the government over what he described as a “budget date fiasco” and a lack of fiscal transparency. He questioned why the announcement of the 2025 national budget had become a drawn-out affair and called for the implementation of a fixed budget date each year to reduce uncertainty.

“This kind of thing should not be happening. Budget date is never really an issue. It’s a simple process.”

Dhanpaul also urged the government to legislate a fixed date for the national budget before the end of the fiscal year, saying it would reduce pressure on state institutions and give the public time to process economic measures in advance.

In assessing the country’s fiscal position, Dhanpaul painted a sobering picture. He said before the government earns a single dollar in revenue, it faces a mandatory monthly expenditure bill of approximately $4.5 billion, translating to $54 billion annually.

Based on current energy price assumptions, US$66 per barrel of oil and US$5 per million British Thermal Units (MMBTU), a standard unit for measuring energy content in fuels, he said revenue could also reach about $54 billion. However, with estimated expenditure climbing to $63 billion, Dhanpaul again projected a $9 billion deficit for fiscal 2025.

“That’s without public service back pay or wage negotiations,” he warned. “Once you go beyond a deficit of five per cent of GDP, you’re putting the country in a very difficult position internationally. That’s the threshold for most rating agencies and institutions like the IMF.”

He questioned how the government intends to finance the growing shortfall, noting both domestic and external borrowing options were nearly exhausted.

“Our domestic loan headroom under the Development Loans Act is almost exhausted: we’ve taken up about 90 per cent of that. Most local banks are saying they are already overexposed to government. So where is the financing coming from?”

Dhanpaul further criticised the government’s decision to abandon the TT Revenue Authority (TTRA), estimating its reversal could cost the state up to $5 billion in lost annual revenue.

“They say they’ll make it up through improvements at the BIR. I’m waiting to see if they can match the performance of the TTRA. But new revenue streams don’t materialise overnight.”

While acknowledging that Finance Minister Davendeanath Tancoo faces a complex economic environment with many competing demands, Dhanpaul said excuses are no longer acceptable.

“This is their budget: no more blaming the previous administration. The population needs to judge them on their own performance.”

Despite his pointed criticisms, Dhanpaul maintained his expectations were patriotic, not political.

“I wish the Minister of Finance well. If he does well, he can treat us well. And I want my country to do well. This is not about politics any more; we need sound policy responses.”