An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers@guardian.co.tt

Trinidad and To­ba­go’s eco­nom­ic out­look, the Gov­ern­ment’s fis­cal con­straints and un­re­solved pub­lic ser­vice back­pay oblig­a­tions are com­ing un­der scruti­ny as econ­o­mists and a for­mer min­is­ter in the Min­istry of Fi­nance weigh in on whether the coun­try’s re­ces­sion should be the cen­tral con­cern.

For­mer Min­is­ter in the Min­istry of Fi­nance Mar­i­ano Browne be­lieves the fo­cus must move be­yond whether the econ­o­my meets the tech­ni­cal de­f­i­n­i­tion of a re­ces­sion to how quick­ly it can re­cov­er and whether the Gov­ern­ment has a cred­i­ble plan for sus­tain­able growth.

“If the econ­o­my has ex­pe­ri­enced two con­sec­u­tive quar­ters of de­cline, then the an­swer is yes, it is in a re­ces­sion,” Browne ex­plained. “The re­al is­sue is, what’s the fu­ture? And where are we go­ing?”

Browne’s com­ments come amid de­bate over the econ­o­my’s per­for­mance and the as­sump­tions un­der­pin­ning the Gov­ern­ment’s 2027 Bud­get.

He ques­tioned the sus­tain­abil­i­ty of pro­ject­ed im­prove­ments, point­ing to the coun­try’s con­tin­ued de­pen­dence on the en­er­gy sec­tor and the need to ac­cel­er­ate di­ver­si­fi­ca­tion over the medi­um and long term.

Browne al­so raised con­cerns about the pro­posed arrange­ment to pay 60 per cent of pub­lic ser­vice back­pay in non-cash form, ar­gu­ing that the mech­a­nism has not been clear­ly ex­plained.

“The bud­get is pred­i­cat­ed on the fact that we’re not go­ing to pay back­pay the pub­lic ser­vice. That 60 per cent of it is go­ing to be paid in non-cash. But what is that non-cash is­sue hasn’t been spelt out,” he said.

While pay­ment in bonds could be an op­tion, Browne ar­gued that the Gov­ern­ment need­ed to clar­i­fy what was be­ing pro­posed and ne­go­ti­at­ed.

He al­so ques­tioned the out­stand­ing oblig­a­tions be­yond 2019, not­ing that the back­pay arrange­ments un­der dis­cus­sion cov­ered the pe­ri­od up to that year, while the 2020 to 2025 pe­ri­od re­mained un­re­solved.

Those oblig­a­tions, he warned, had im­pli­ca­tions for the Gov­ern­ment’s bud­getary po­si­tion at a time when its fu­ture rev­enue re­mained un­cer­tain.

Browne fur­ther cau­tioned against dis­miss­ing con­cerns raised by the Op­po­si­tion, ar­gu­ing that the eco­nom­ic and fis­cal is­sues re­quired care­ful ex­am­i­na­tion rather than be­ing treat­ed as po­lit­i­cal dis­agree­ment.

Mean­while, econ­o­mist Dr In­dera Sage­wan al­so ac­knowl­edged that the econ­o­my was in a tech­ni­cal re­ces­sion, de­fined by two con­sec­u­tive quar­ters of neg­a­tive growth. How­ev­er, she be­lieves the broad­er tra­jec­to­ry of­fers some grounds for cau­tious op­ti­mism.

“The over­all growth for 2026, even though neg­a­tive, was bet­ter than in 2025, which sug­gests that the econ­o­my is mov­ing very, very slow­ly, but mov­ing in the right di­rec­tion,” Sage­wan ex­plained.

She ex­pects 2027 to be a stronger year, point­ing to an­tic­i­pat­ed im­prove­ments in nat­ur­al gas sup­plies and pos­i­tive trends in non-en­er­gy ac­tiv­i­ty, par­tic­u­lar­ly agri­cul­ture and agro-pro­cess­ing.

Sage­wan stressed, how­ev­er, that re­cov­ery would be grad­ual rather than trans­for­ma­tive in the short term.

“There is not go­ing to be any ma­jor trans­for­ma­tion. Trans­for­ma­tion takes time,” she said, adding that progress could re­main slow un­til around 2028 or 2029.

She al­so warned that fis­cal 2027 would re­main dif­fi­cult, with the Gov­ern­ment fac­ing lim­it­ed fis­cal space and sub­stan­tial debt re­pay­ments that con­strain its abil­i­ty to fi­nance new ex­pen­di­ture.

The re­ces­sion de­bate in­ten­si­fied dur­ing the 2027 Bud­get de­bate, when Op­po­si­tion Leader Pen­ne­lope Beck­les ac­cused the Gov­ern­ment of putting the econ­o­my in­to re­ces­sion. She cit­ed a 0.5 per cent con­trac­tion in 2025 and a pro­ject­ed 2.2 per cent de­cline in 2026.

Yes­ter­day, Prime Min­is­ter Kam­la Per­sad-Bisses­sar de­fend­ed the Gov­ern­ment’s bud­getary di­rec­tion, in­sist­ing the coun­try was mak­ing progress de­spite fi­nan­cial chal­lenges in­her­it­ed from the pre­vi­ous ad­min­is­tra­tion.