Dix­ie-Ann Dick­son

Chief ex­ec­u­tive of­fi­cer of First Cit­i­zens, Lar­ry Howai, says he is in sup­port of an ex­pan­sion­ary bud­get pro­vid­ed that in­vest­ments oc­cur in ar­eas which would con­tribute to na­tion­al growth and in­crease rev­enues for the Gov­ern­ment over time. Howai spoke in an in­ter­view on Fri­day at the bank's launch of its PINK visa cred­it card at Hilton Trinidad and Con­fer­ence Cen­tre, St Ann's, hours af­ter Prime Min­is­ter Kam­la Per­sad-Bisses­sar an­nounced that the 2011/2012 bud­get would be pre­sent­ed on Oc­to­ber 10. Per­sad-Bisses­sar said the ar­eas of in­vest­ments main­ly in­clud­ed con­struc­tion of five hos­pi­tals, a Caribbean fer­ry ser­vice and a sports life fund. Howai said it was im­por­tant for the Gov­ern­ment to en­gage in ini­tia­tives which would spur the econ­o­my be­cause one of the is­sues that need­ed to be ad­dressed was the un­em­ploy­ment rate.

While the in­fla­tion seemed to be com­ing un­der con­trol, he said, un­em­ploy­ment, which was rel­a­tive­ly low, was now ex­pe­ri­enc­ing an in­crease, which re­quired some at­ten­tion. T&T un­em­ploy­ment was at six per cent ver­sus Unit­ed States' nine per cent, he not­ed. "But with re­spect to ini­tia­tives mov­ing the econ­o­my for­ward, we are hop­ing that the Fi­nance Min­is­ter will con­tin­ue an ex­pan­sion­ary bud­get," Howai said. An ex­pan­sion­ary bud­get is an in­crease in Gov­ern­ment ex­pen­di­tures and/or a de­crease in tax­es that caus­es the Gov­ern­ment's bud­get deficit to in­crease or its bud­get sur­plus to de­crease. An ex­pan­sion­ary bud­get leads to a larg­er Gov­ern­ment bud­get deficit or a small­er bud­get sur­plus.

Howai ex­plained that even though he sup­port­ed Gov­ern­ment prob­a­bly go­ing with the same bud­get deficit from this year to next year, it must be con­scious of how that would im­pact on long-term debt sus­tain­abil­i­ty lev­els. He said the Gov­ern­ment could make it work be­cause it had some de­gree of free­dom with some of its re­sources. In the short term, Howai said, the key area will be in­fra­struc­ture spend­ing, while in the medi­um-term the fo­cus had to be on the at­trac­tion of for­eign di­rect in­vest­ment to help boost the en­er­gy sec­tor. In the long-term, the fo­cus should be on the con­tin­ued di­ver­si­fi­ca­tion of the econ­o­my and the de­vel­op­ment of the ICT sec­tor, which helped con­tribute to a knowl­edge-based so­ci­ety, he added.