Minister of Finance Colm Imbert. Photo: Parliament of T&T
By Sue-Ann Wayow
TRINIDAD and Tobago’s sovereign wealth fund – the Heritage and Stabalisation Fund (HSF) stands at US$5.73 billion, higher at the end of September 2020 than in September 2015.
This was despite withdrawals totalling US$1.6 billion over the period 2016 to 2020 said Finance Minister Colm Imbert as he read the 2020/2021 Budget on Monday.
Imbert said, “Our sovereign wealth fund has thus performed remarkably well, and in 2020 alone, after losing US$1 billion in value following the collapse of world stock markets in February and March, the Fund has recovered every dollar it has lost, through the astute management of the fund managers.”
Imbert said although Government had to tap into the fund to deal with the unexpected Covid-19 crisis, it was nothing unusual as Governments worldwide have been turning to their sovereign wealth funds to finance the impact of the structural change in global energy markets and to deal with the economic fallout resulting from the Covid-19 pandemic.
Government’s comprehensive measures to deal with the pandemic led to a slump in economic activity and a significant revenue shortfall affecting both energy and non-energy revenues. Finances were raised through a combination of local and foreign borrowing supported by withdrawals from the HSF, Imbert said.
He said, “On March 26 the Government presented and the Parliament approved, an amendment to the HSF Act to allow for withdrawals of up to US$1.5 Billion during the financial year, in the event of a health crisis, a natural disaster or a precipitous drop in budgeted revenue. As indicated earlier, as a result of Covid-19, the fiscal deficit for 2020 is now estimated at $16.8 billion, over $10 billion more than originally envisaged. To support the financing of this deficit, US$900 million or just over $6 billion has been withdrawn from the HSF, under the recent amendment.”