MIXED MESSAGES are being sent by the Cabinet on the economy, so next Thursday's address by Finance Minister Colm Imbert is a chance for much-needed clarity.
On the one hand, the Prime Minister earlier this month put the country on notice that current subsidy levels may be unsustainable.
Instead of expecting a windfall in revenues thanks to higher petrochemical prices, the country should prepare for a hike at the pump, because the cost of insulating citizens from price shocks may become prohibitive.
'They cannot be insulated completely,' Dr Rowley said. 'I don't see the hike in oil prices as opening up volumes, because we are not producing the same levels as before.'
On the other hand, Mr Imbert and Minister of Energy and Energy Industries Stuart Young on Tuesday in the Senate painted a somewhat more optimistic overall picture.
'When we look at the outlook for crude oil and condensate production and we look at the outlook for gas production, what we are seeing is that there is going to be significant improvement over the medium term,' Mr Imbert said. 'So we do expect some increase in inflows in fiscal 2022 from the energy sector.' This, he said, would improve the foreign exchange situation.
Mr Young further declared, 'The outlook for natural gas production is positive.' No significant emphasis was placed by either on the question of transfers.
Whether these ministers were effectively walking back the Prime Minister's earlier suggestion that all that glitters is not gold remains to be seen.
It is arguable both were simply opting to see the glass half-full, and that there is nothing inconsistent in saying the fuel subsidy is unsustainable while also saying revenues will be healthy. (Mr Imbert also acknowledged the unpredictability of market dynamics.)
But if that is the case, this should be spelled out next week. Certainly, the different tones are confusing. Are we in a period of austerity or not?
The International Monetary Fund (IMF) has predicted economic growth of 5.5 per cent for this fiscal year, but some of this merely offsets contraction experienced between 2020 and 2021.
If there is a disjunction between what the Prime Minister and his ministers are saying about the economic outlook, there is also arguably something of a disconnect between official assessments of the macroeconomic picture and the quality of life of ordinary citizens, not all of whom benefit from oil and gas price windfalls.
With concerns about unemployment, the IMF reported on delayed employment data. It also noted a significant portion of the retail sector had closed its doors permanently.
With the economy set to reopen fully, Mr Imbert needs to do more than clarify what is coming. He should also tell us what the plan is to remedy the losses suffered.
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