Last update: 06-Dec-2013 9:53 pm
Saturday, December 07, 2013
Trinidad & Tobago Guardian Online
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IMF: T&T borrowing to save
T&T is effectively borrowing to save, the International Monetary Fund (IMF) said in its latest country report released this month. In their statement, made since June 14, but only released on October 3, IMF executive director Paulo Nogueira Batista and advisor Kevin Finch wrote: “The government remains committed to saving a portion of the proceeds from its non-renewable resources for future generations through the Heritage and Stabilisation Fund (HSF).
“A statutory review of the HSF, due every five years, was recently completed. The proposed changes were not radical but sought to streamline the operations of the fund and clarify deposit and withdrawal rules. Staff argues that making transfers to the HSF while the overall fiscal position is in deficit is tantamount to borrowing to save.
“However, the authorities stress that deposits are governed by the HSF law which dictates that transfers to the fund must be made as long as actual energy revenues surpass budgeted energy revenues by more than ten per cent. Thus, deposits to the HSF are independent of the overall fiscal balance. Furthermore, the authorities’ conservative approach towards estimating energy prices for budget purposes has served the country well and has facilitated the building of this important buffer.”
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