SAN JUAN – The International Monetary Fund has urged oil exporter Trinidad and Tobago to further adjust economic policy in line with the fall of global prices for crude, the government of the twin-island nation said Monday in a statement.
The IMF recently concluded a mission to review the economic policies put in place by administration of Prime Minister Keith Rowley, who was elected last September.
“The country has under-saved and under-invested in its future. As a consequence, the imbalances that are now starting to build up could lead the country to uncomfortable levels of debt and external financial cushions unless action is taken,” IMF mission chief Elie Canetti said.
The IMF said Trinidad and Tobago is projected to run a deficit equal to 11 percent of GDP in 2016.
IMF officials noted significant changes by the government to tackle economic challenges, such as widening the base of products and services subject to value added tax, reducing fuel subsidies and trimming the number of government ministries in the context of spending cuts.
“The government has also agreed to conduct a wide-ranging expenditure review, and will seek the assistance of the World Bank to rationalize and reverse the unsustainable increases in spending on transfers and subsidies over the last several years,” the IMF said.
Trinidad and Tobago stands to lose more than $370 million due to the fall in oil prices, the government said in January.