Dhanpaul warns Trinidad and Tobago deficit could reach $10 billion

Trinidad and Tobago could be heading toward a deficit close to $10 billion, People’s National Movement Senator Vishnu Dhanpaul warned as the government prepares its next national budget.

Dhanpaul, a former finance minister, said the United National Congress-led government had continued borrowing to fund recurrent expenditure without generating enough additional revenue. He spoke at a news conference at the Office of the Leader of the Opposition in Port of Spain.

He said the government’s financial position had deteriorated sharply. The fiscal 2026 budget projected a deficit of about $3.865 billion, he said, but that figure had risen to $7 billion by the Mid-Year Review. Dhanpaul argued that the eventual deficit for fiscal 2026-2027 could be considerably higher.

“We could be looking at a deficit close to $10 billion,” he said. Dhanpaul suggested the government might avoid projecting that figure to international creditors. He also warned that weaker international energy-price forecasts, higher wage and arrears obligations, debt pressures and the need to balance recurrent spending with development projects could complicate the next budget.

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We could be looking at a deficit close to $10 billion.

Dhanpaul questioned what Finance Minister Davendranath Tancoo planned to do to increase revenue within a reasonable time. He said the administration’s “revitalisation” plans, announced earlier in the year, would not affect the economy soon because they were not yet being implemented.

Monthly recurrent spending is about $500 million, including social grants and salaries, Dhanpaul said. The government’s promised back pay for teachers and proposed wage increase for public servants also remain unsettled, he said. He criticised borrowing for recurrent expenditure as harmful because it does not create productive capacity that can generate economic activity.

Dhanpaul said previously announced revenue initiatives had yet to materialise. He also pointed to the scrapping of a proposed Trinidad and Tobago Revenue Authority, which the former PNM government had projected could raise about $10 billion annually. He suggested the finance minister might delay some expenditures to avoid presenting an unfavourable deficit to international creditors.

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Borrowing to fund recurrent expenditure is a terrible, terrible thing, because it doesn't create productive capacity in the economy to generate economic activity.