Planning minister guarded about T&T's economic state

Planning Minister Mary King said Sunday it is is "too early" to say whether the Trinidad and Tobago government would be forced to increase taxes or reduce subsidies.

King was speaking with the Trinidad Guardian about her contribution in the Senate last Tuesday, while presenting a government motion for debate on the state of the Trinidad and Tobago economy.

King said the economy is not in the best health. However she noted that it is “not a basket case".

She suggested that while there might be some strength today there is the possibility of a "rapid degeneration" resulting from the global recession and other negative issues.

"The private sector is not investing in the production of goods and services and local consumers are not borrowing to purchase," she noted, adding that construction and distribution are also down.

According to King, who is an economist, the immediate issues that could have a negative impact on the economy include:

• the global glut in natural gas prices and its continuing low prices
• the poor Caricom market
• the stagnant local market
• the difficulty facing the Government to reduce spending while seeking to meet increasing demands of the society without increasing taxes
• the need to spend large sums of money to complete mainly unproductive and unnecessary buildings with massive cost overruns

King also said there is little chance of attracting foreign investment to the Industrial Park at Tamana, because there is nothing there to attract that kind of investment locally.

Trinidad and Tobago experienced a recession in 2009, she noted because of four secuccesive quaters of "negative growth".

Commenting on the previous government's fiscal programs, King said expenditure during the last three fiscal years stood at a total of more that $137 billion ($44.7 billion, $45.6 billion and $46.8 billion respectively).

During the same time subsidies and transfers reached nearly $60 billion. The minister suggested that if the government wants to maintain that spending level it would have to borrow in the short term, “otherwise it could consider cutting or optimising its spending or increasing taxes if its income does not rebound.”

King told the Guardian the government is looking at all the options available to ensure the country's economic development.