16 August, 2009

Economist predicts $7b budget shortfall

Well-known economist, Dr Dhaneshwar Mahabir has estimated that the government of Trinidad and Tobago will experience a $7b shortfall in the coming fiscal year.

“Mahabir estimated that the coming National Budget will be close to $45 billion, even though maximum revenues are projected to be $38 billion.
Describing the economic scenario as gloomy, the economist said he could not say when T&T would recover but noted that the country would experience a major revenue shortfall for 2009 and 2010.

Mahabir said if things got really bad, the Government may even be forced to borrow money from the International Monetary Fund, which would require an adjustment programme in return.”

The respected economist admits that we are in the midst of a recession, contrary to what Central Bank Governor, Ewart Williams has been saying at a recent press conference.

There are myriad reports on how to cope with a recession. They all have two strategies at their core: earn more, spend less. This advice is so elegant in its simplicity that we may ignore it, choosing instead to look for some magic bullet; some esoteric answer to the problem.

In spending, one must be prudent. Spending on tangibles, such as real estate, tools, equipment, open-pollinated seeds, fuels, etc. Of course we should never forget to add to the mandatory stockpile of beans, bullets and band-aids.

Panic now. Avoid the rush.

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