Trinidad and tobago: The Energy Boom and Proposals for a Sustainable Fiscal Policy

October 1, 2005

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Trinidad and tobago: The Energy Boom and Proposals for a Sustainable Fiscal Policy, (USA: International Monetary Fund, 2005) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Trinidad and Tobago is experiencing an energy boom stronger than the ones in 1970s and 1980s. The main fiscal policy challenge is to ensure that the increased revenues from the ultimately exhaustible resources are used in a way that protects the competitiveness of the nonenergy sector, builds assets to ensure intergenerational equity, and provides a cushion for stabilization. This paper derives estimates of a sustainable level of primary fiscal balance using Friedman's permanent income hypothesis. These estimates can be used as a guide for the formulation of medium- and long-term fiscal policy frameworks.

Subject: Commodities, Economic sectors, Energy sector, Fiscal policy, Government consumption, National accounts, Natural gas sector, Oil

Keywords: Asia and Pacific, Cost-benefit profile, Energy resource, Energy sector, Europe, Fund, Fund staff estimate, Government consumption, Industrialization strategy, Investment strategy, Natural gas sector, Oil, Oil boom, Oil price, Permanent income hypothesis, Requireparliamentary approval, Resource fund, Resource funds can, Resource savings fund, Savings fund, Trinidad and Tobago, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/197
Stock No:

WPIEA2005197
ISBN:

9781451862164
ISSN:

1018-5941

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