Cutbacks coming in 2013 budget

Austerity measures will be announced in this year’s national budget, says Finance Minister Larry Howai. “We have to come up with a judicious mix of stimulus measures to move the economy forward, while at the same time identifying areas where we have to implement some austerity measures in order to get best value for money.

“Notwithstanding the turbulence of the global economy, it continues to remain very challenged. There are challenges in Europe and the United States, then there is the fiscal risk in 2013 which, if not handled well, could put the US and the rest of the world back into recession,” he said. Howai was speaking yesterday at the Caribbean Forum hosted by the Caribbean Development Bank (CDB)  and International Monetary Fund (IMF) at the Hyatt Regency Trinidad hotel, Port-of-Spain.

Despite the global economic climate, he said the T&T economy is doing well compared to some of its regional neighbours. “While there are significant risks out there, T&T continues to do reasonably well. Hopefully, by the end of the year, the economy would have shown some growth. Our foreign reserves remain strong with over 12 months of import cover, unemployment remains low.

“There is still much to be done in that area in terms of creating jobs and the value-added jobs for the economy. Core inflation is good, but food prices tend to throw it off. By and large, we have a strong, stable economy. We are among the leading countries of the world as far as that is concerned,” he said. The country should expect to see positive results in the economy within a year or two, he said.

“There will be some measures in the budget to deal with income generation. At the end of the day, if your top line keeps coming down and the expense keeps going up, you will end up in trouble. That is not a sustainable position. You have to ensure your top line continues to grow, that is, your revenue, and we have to identify means and measures for doing that. It will not happen overnight, it will take some time to see the results. Even if we do not see the results in 2013, certainly by 2014.”

Cabinet still has to announce a date for reading of the budget. “I am still waiting on getting approval from Cabinet. We do have figures worked out, but I would not want to pre-empt anything before the national budget. It would be reviewed by Cabinet before we issue any final statement. We do not normally broadcast any issues prior to the budget,” he said.

Present at the opening ceremony were government officials and technocrats from across the region, including  St Vincent Prime Minister Ralph Gonsalves, Grenada’s Finance Minister,Nazim Burke and Hunter Monroe, senior economist at the IMF.