Trinidad and Tobago is headed to the IMF. It's the dire warning coming from the Opposition, which is urging the government to reconsider its decision on the Revenue Authority and other revenue-generating measures, ahead of the 2026 Budget presentation. Rynessa Cutting reports.
00:00Are you saying that the economic situation is such that we appear to be heading to the IMF?
00:05I didn't say that. I said that when you see that drastic level of decline in your reserves,
00:12and you're seeking balance of payment support, there's only one agency you can call.
00:18Which agency is that?
00:21There's only one at the International Monetary Fund because they provide balance of payment support.
00:29The writing is on the wall according to the opposition, which is painting a dire economic picture for TNT ahead of the reading of Budget 2026,
00:39with import cover now at roughly five months, with the IMF benchmark being three months.
00:46In May 2025, the net official reserves stood at 5.093 billion.
00:58But for some strange reason, by August 2025, it declined drastically to 4.6 billion dollars.
01:06The country needs to know, not necessarily vision of the IMF, but the country needs to know whether the 600 million reserves disappear since they came in office.
01:16U.S.?
01:17U.S., huh? 600 million U.S.
01:19The former finance minister is projecting revenues at 54 billion dollars for fiscal 2026.
01:26But with no definitive additional revenue streams announced, Dan Paul says the government has backed itself into a corner.
01:34Even before the country earns one dollar in revenue, the country faces a bill.
01:42It's a monthly bill of 4.5 billion dollars in monetary expenditure.
01:49Can't escape that.
01:52Those are things like, and I mentioned it before, those are things like old age pension, disability grant, public assistance grant.
01:58The bill is 4.5 billion dollars a month, which translates to 54 billion dollars a year.
02:06So immediately, you have an expenditure bill of 54 billion and a revenue collection estimated at 54 billion.
02:19As such, he's projecting a minimum deficit of 9 billion dollars, which will mean the government will have to borrow.
02:27But with domestic and external borrowing limits both narrowing their ceilings, he's sounding the alarm.
02:34How do you solve that?
02:36Well, the Minister of Finance and the government are going to have to approach the parliament to increase the borrowing limit on both the domestic side and the external side.
02:48Red flag, immediate red flag to all the credit agencies.
02:54The chances of being downgraded with raising that kind of financing and increasing that ceiling is highly likely.
03:04And what that means is that it makes it even more difficult and more expensive to borrow.
03:10Last month, credit agency Standard & Post revised TNT's outlook from stable to negative.
03:17And Dan Paul notes central bank's overdraft is at an all-time high.
03:22That exchequer account, and I'm putting it out here to everyone, that exchequer account now stands at 50 billion dollars.
03:31And the only way we could get out of that exchequer account and remove fiscal policy from the clutches of the overdraft facility at the Central Bank is by paying off that 50 billion.
03:45And the only way you could pay off that 50 billion, the country must run fiscal surpluses unless you are able to run surpluses to reduce that 50 billion dollars.
03:57There are certain accounts that you simply cannot use because it has been mortgaged to that 50 billion dollars.
04:03You cannot use the Green Fund. You cannot use the Infrastructure Development Fund because it will all impact the overdraft facility.
04:12Very, very, very critical to understand and the national population must understand this.
04:17The 50 million, while not included as part of our overall debt, is a debt.
04:24The opposition is urging the government to reconsider its decision on the Revenue Authority.
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