The grim global economic picture painted by 11 multilateral and regional institutions, led by the IMF, the World Bank and the WTO, must be cause for concern here in Trinidad and Tobago.

A World Bank report titled Global Economic Prospects, which is endorsed by the other institutions, projects negative growth in the eurozone in 2012, and lowers growth forecast in developed countries from 2.7 per cent to 1.4 per cent.

The report warns that things could get much worse.

If the looming credit squeeze sends Spain and Italy into a tailspin, then the eurozone economy could contract by as much six per cent.

In such a scenario, the world would face yet another recession, this one potentially more severe than the last.

During the crisis of 2007-2008, emerging economies like Brazil, Russia, India and China (BRIC) remained largely untouched, experiencing robust growth rates averaging eight per cent per annum, which slowed down only in 2011.

These, and other relatively strong economies, kept the global economy afloat by increased consumption of critical commodities like oil, natural gas, ores, metals and food.

Today, all these countries are experiencing slower growth rates.

If the eurozone shows further decline and the US economy remains stagnated, markets for goods from the BRIC countries would dry up, compounding their challenges, and adversely affecting the entire world.

All of the above suggest that Trinidad and Tobago should brace for an economic storm unprecedented in recent history.

Already we have experienced negative growth for three successive years.

We have also resorted to deficit budgeting over the same period. Government has little choice but to borrow money to finance its developmental projects.

As we have noted before in this space, there is nothing wrong with deficit budgets or with borrowing money.

However, World Bank chief economist Justin Lin warns countries like Trinidad and Tobago, "There will be less fiscal and monetary space for remedial measures. As a result, their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply."

Hans Timmer, director of Development Prospects at the World Bank, added, "Developing countries should pre-finance budget deficits, prioritise spending on social safety nets and infrastructure, and stress-test domestic banks."

Speaking recently at an investment forum, Finance Minister Winston Dookeran said (of the current economic challenges), "...We must find new ways to attain sustainability, which, in my view, is the capacity to adjust, the ability to cope and the existence of buffers."

Regarding buffers, he cited the Heritage and Stabilisation Fund, which is estimated to be US$4 billion.

Dookeran might have added that our foreign reserves are also healthy, standing at close to US$10 billion, or 12 months import cover.

But Government would hardly want to tap into these two buffers unless desperation sets in.

As the country faces a grim 2012, we can take little comfort in the fact that many other countries, some of them developed economies, are likely to be worse off than T&T.

We note that based on World Bank projections, many commodities' prices are likely to be favourable over the next five years.

Crude oil and gas futures look good; these form about 80 per cent of our export earnings.

Prices of our main imports-grains, edible oils, meats, dairy products-look stable, even declining in instances.

On the negative side, most Caricom countries, which are critical to our exports, will fare worse than us in a global recession.

Jamaica, our biggest regional export market (35 per cent), will soon seek IMF support.

And three of our four main international markets (as of 2011), the USA, Spain and the UK, face serious economic challenges.

Also, just as we are about to shift focus to South-South trade, the BRIC countries and other non-traditional markets have seen their economies decline, which could mean they cut back on imports.

The portents are not good.

However, we have been through global recessions before, and we have rebounded.

Hopefully, we learned lessons from those experiences that would help us weather the coming storm, and emerge from it wiser if not stronger.