8 20 07 27 28 Primary central government balance excluding interest payments 47

8 20 07 27 28 primary central government balance

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1.8 2.0 0.7 2.7 2.8 Primary central government balance (excluding interest payments) 4.7 6.9 6.4 5.1 6.8 6.0 Central Government overall balance -0.6 -0.6 0.7 -0.2 1.1 0.6 External financing 2.0 3.3 -1.4 -0.3 0.0 0.0 Internal financing -1.4 -2.7 0.7 0.5 -1.1 -0.6 Statutory bodies .. -1.7 -1.7 -0.8 -0.6 -0.9 Public enterprises .. 0.8 -1.1 -2.4 0.6 0.4 Public sector balance .. -1.5 -2.1 -3.0 1.1 0.1 Memo items Fiscal year GDP (million TT$) 41,700.1 49,250.0 54,105.5 55,301.8 63,490.2 70,445.9 Non-hydrocarbons central government balance (% of GDP) -3.2 -6.6 -8.3 -7.3 -8.3 -8.2 Central Government debt (% of GDP) 44.1 42.1 37.1 37.3 33.8 31.0 Gross public sector debt (% of GDP) 56.1 54.4 55.0 59.3 55.9 52.7 Central Government debt service (% of exports of goods and non-factor services) 20.4 12.1 16.6 14.0 4.6 5.7 .. Not available. Note: There may be slight differences in the totals due to rounding off. Fiscal years run from 1 October to 30 September. Source: WTO Secretariat based on information provided by the Ministry of Finance.
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Trinidad and Tobago WT/TPR/S/151 Page 9 25. The taxation system is heavily dependent on taxes on the hydrocarbons industry (see Chapter III(4)(i)), which account for some 40% of total revenue. The share of taxes in total revenue, in particular taxes on income and profits, has increased substantially since FY 2002/03 on account of the increase in production and prices in the hydrocarbons sector. Although there has been an overall public sector surplus since FY 2002/03, the non-hydrocarbons sector fiscal balance has been in deficit throughout the period under review. This deficit reached 8.2% of GDP in FY 2003/04, and is an important contributor to the liquidity build-up in the economy. 14 26. The public debt ratio fell during the period under review, from 56.2% of GDP in FY 1998/99 to 52.6% in FY 2003/04, mainly triggered by a strong reduction in Central Government debt. Public sector external debt declined by 8 percentage points of GDP in the 1999-03 period to about 15% of GDP at end 2003; most of the debt is long-term and from commercial creditors (Table I.5). The external debt service declined from 20.4% of exports of goods and non-factor services in FY 1998/99 to 5.7% in FY 2003/04. (v) Balance of payments 27. The current account surplus rose by over 13 percentage points of GDP, to 14.2% of GDP, between 1999 and 2004 (Table I.5), as a result of higher petroleum prices and an increased volume of natural gas exports. Exports from the hydrocarbons sector are responsible for this surplus: the rest of the economy posts a current account deficit. 28. Due to the extent of its exports of hydrocarbons and related products, Trinidad and Tobago traditionally posts a merchandise trade surplus. Exports more than doubled between 1999 and 2004, to reach US$6.4 billion; exports of natural gas and petrochemicals increased particularly fast. Merchandise imports also increased rapidly during the period under review, expanding by 78% between 1999 and 2004. The capital-intensive nature of the hydrocarbons sector triggers strong imports of capital goods when there is an investment boom in the sector, as experienced in the past few years. 29. Traditionally, the balance of non-factor services posts a surplus, primarily from travel, transportation, and insurance. This surplus has been increasing since 2000. The deficit in investment income reflects remittances of profits and dividends by companies, especially in the hydrocarbons sector, as well as interest payments abroad.
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