Government needs to focus on spending money in ways that will stimulate the middle class in society, economist Indera Sagewan-Alli has said.

"If you stifle your middle class, you stifle growth and the middle class in Trinidad and Tobago has been stifled. There must be opportunities to loosen the gag around them," she said in a telephone interview.

Prime Minister Kamla Persad-Bissessar recently announced that the national budget 2012/2013 will be presented on October 1.

It will be the first budget presented by Finance Minister Larry Howai, who was appointed in May.

A deficit budget designed to stimulate growth must be used for Public Sector Investment Programmes (PSIP), Sagewan-Alli told the Express earlier this week.

"Our expenditure exceeds our revenue generation. That is the reality of our annual position and this past year has not been any different. We have had deficit budgets over the last two years that, in hindsight, did not reflect stimulus but were, by and large, for increased social programmes and transfers and subsidies and cuts in the PSIP programmes, where the stimulus should have taken place," she said.

Sagewan-Alli said the key was proper implementation by line ministers in charge of PSIP projects to ensure they put things in place so spending for these programmes happen.

"I hope (Howai) will put increased demands on implementing ministers to ensure there is value for money spent," she said, adding that she did not expect any significant cutbacks.

She said, however, that there will probably be emphasis in the budget on cutting out leaks—especially in programmes like the Government Assisted Tertiary Expenses programme and subsidised fuel.

"If the ministers in charge become more aggressive in plugging the leaks, we can see the result of some of that to be reduced expenditure—which we know is what (Howai) wants without actually having to bring that sharp chopper down in a brutal way to make people feel the negative social implications," she added.