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Wednesday, July 16, 2025

Hilaire: no alarm over T&T's debt

by

263 days ago
20241026
Central Bank Governor Dr Alvin Hilaire

Central Bank Governor Dr Alvin Hilaire

NICOLE DRAYTON

Pe­ter Christo­pher

Se­nior mul­ti­me­dia re­porter

pe­ter.christo­pher@guardian.co.tt

Re­port­ing from Wash­ing­ton DC

​Cen­tral Bank Gov­er­nor Dr Alvin Hi­laire says Trinidad and To­ba­go is well placed to avert the prob­lem of ris­ing debt lev­els, even as that is­sued was red­flagged as a glob­al con­cern at this week's In­ter­na­tion­al Mon­e­tary Fund (IMF) meet­ings in Wash­ing­ton DC.

"Trinidad and To­ba­go, Of course, we do have a bur­geon­ing glob­al debt prob­lem. Be­cause many coun­tries have in­creased their debt in the wake of the pan­dem­ic, to deal with vac­cines, to deal with pub­lic health is­sues, to deal with so­cial sup­port. So their debt has gone up and in a con­text where in­ter­est rates were very high. So good news all over. But I think with the geopol­i­tics that we have in the Mid­dle East, with Ukraine, with all elec­tions, we have to be very, very care­ful and vig­i­lant," said Hi­laire in an in­ter­view with Guardian Me­dia at the IMF Head­quar­ters

Di­rec­tor of the Fis­cal Af­fairs De­part­ment, Vi­tor Gas­par, warned that glob­al debt to GDP ra­tios could top 100 per cent by the end of the decade as he pre­sent­ed the analy­sis of the IMF Fis­cal Mon­i­tor re­port at a press brief­ing on Wednes­day.

Hi­laire is part of T&T's con­tin­gent at the IMF's an­nu­al meet­ing. He con­firmed that he took part in sev­er­al meet­ings, in­clud­ing the G24 meet­ing which took place in Wash­ing­ton on Tues­day.

He said while Gas­par had valid con­cerns about glob­al debt, alarm bells should not be sound­ed for T&T just yet.

"I think Trinidad and To­ba­go is in the for­tu­nate po­si­tion in that when we en­tered the pan­dem­ic, we had some im­por­tant buffers. One, we have good re­serves. Two, we had a strong Her­itage and Sta­bil­i­sa­tion Fund. And three, we had fair­ly low debt, so that the Gov­ern­ment and the Cen­tral Bank were able to pro­vide fis­cal sup­port, mon­e­tary sup­port, with­out an in­crease in in debt too much, be­cause we were able to draw down on those buffers."

Ac­cord­ing to the 2024 Re­view of the Econ­o­my, which was one of the 2025 bud­get doc­u­ments, T&T's gov­ern­ment debt to­talled $100.23 bil­lion as at Sep­tem­ber 30, 2019, the end of the 2019 fi­nan­cial year.

T&T's debt to GDP ra­tio in 2019 was 61.9 per cent.

The pro­vi­sion­al es­ti­mate of the T&T Gov­ern­ment debt at the end of the 2024 fi­nan­cial year $140.58 bil­lion, ac­cord­ing to the 2024 Re­view of the Econ­o­my. That was an in­crease of 40 per cent in the six-year pe­ri­od.

How­ev­er, the pro­vi­sion­al es­ti­mate of T&T's debt to GDP at the end of the 2024 fi­nan­cial year was 75.6 per cent.

T&T's do­mes­tic debt in­creased from $72.91 bil­lion in 2019 to an es­ti­mat­ed $103.84 bil­lion at the end of the 2024 fi­nan­cial year on Sep­tem­ber 30, an in­crease of 42.4 per cent.

The coun­try's for­eign debt (in TT dol­lars) in­creased from $$27.32 bil­lion in 2019 to an es­ti­mat­ed $36.73 bil­lion in 2024. That's an in­crease of 34.4 per cent.

The es­ti­mat­ed debt of $140.58 bil­lion in as at Sep­tem­ber 30, 2024 com­prised cen­tral gov­ern­ment do­mes­tic debt of $73.99 bil­lion, cen­tral gov­ern­ment ex­ter­nal debt of $36.73 bil­lion and non-self ser­viced gov­ern­ment guar­an­teed debt of $29.84 bil­lion.

Hi­laire stressed that the gov­ern­ment would have to be care­ful with its eco­nom­ic pol­i­cy to avoid sink­ing in­to prob­lem­at­ic debt.

"So again, I think we are in a fair­ly de­cent place, but vig­i­lance is the key, be­cause if you don't have im­por­tant re­forms, then things could go out the win­dow," said the Cen­tral Bank Gov­er­nor.


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