The credit-rating agency, Moody’s, has described last month’s decision by Cabinet to draw down US$251 million from T&T’s Heritage and Stabilisation Fund (HSF) to finance part of the capital expenditure in the 2017 budget, as “credit negative because it reflects a deteriorating fiscal position driven by large fiscal deficits amid lower energy-related government revenues.”
In a March 23rd note from its twice-weekly credit outlook, Moody’s said of the drawdown decision: “By reducing the size of its HSF, the sovereign is also eroding an important fiscal buffer. The HSF currently totals $5.7 billion, roughly 24 percent of GDP, and is composed of financial assets derived from oil and gas revenues accumulated during boom years.”
In a statement on March 17th, the day after the Cabinet took the decision to draw down US$251 million from the HSF, Finance Minister Colm Imbert was at pains to point out that the March 2017 drawdown returned the HSF to where it was in May 2016, when the government withdrew US$375 million from the fund.
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