As you heard, Prime Minister John Briceño mentioned his government's current plan to keep the price of fuel low using a fuel stabilization fund. That plan also involves a small haircut on the government's taxes. As the PM has consistently warned, any reduction in tariffs means less revenue for the government.
In their report, the IMF noted quote, "Going forward, the primary balance is projected to decline to -0.1 percent of GDP in Financial Year 2022 due to measures adopted by the government to mitigate the rise in fuel prices." End quote.
We asked Briceno about that projections, and here's how he responded:
Hon. John Briceno, Prime Minister
"First of all, when people are attacking the government for the rise in fuel, we were making the point that we did not raise the taxes. The taxes are already set. We're collecting the same amount of taxes as set by the previous government. But we understand the situation, and we understand that fuel is the engine for the economy, and that is what fuels growth. We could not in good conscience just say, 'well, it's not our fault.' Our aim is able to reduce poverty. How we reduce poverty is by growing the economy. But if we're stifling the economy with a high price for fuel, then we are going to lose the battle. We're going to lose the growth that we want to produce. So now we said, well, OK, we have to make some sort of sacrifice. The IMF looks at numbers. We look at people. We are here to try our very best to make the lives of our citizens better. And, if that means that we have to get the IMF upset, so be it. You know, we need to be able to see what we can do. We have every confidence that with what we're doing and continuing to push the growth of the economy, not the primary balance, we hope that we can be able to improve maybe by the end of the year. If you look at what the IMF was saying about us last year in January, it was a bad report that they gave. And towards the end, they had to give us credit for the work that we're doing. We have to be focused. We are fighting poverty, and to fight poverty, we must grow the economy and create opportunities. And by growing the economy, then we could hopefully collect the taxes that we are giving up, or we are offsetting."
