Independent Senator Subhas Ramkhelawan has predicted there would be no savings next year in the Heritage and Stabilisation Fund.

In his contribution to the Budget debate in the Senate yesterday, Ramkhelawan said he cannot foresee any savings based on how the 2008-2009 budget was structured.

He said money is deposited into the fund based on surpluses, and it is hardly likely that there would be any in the financial year.

"The world is on a cusp of a long recession," said Ramkhelawan as he advised that it cannot be business as usual in the face of an economic meltdown.

"However strong our economy is, we will not be immune to what is happening out there," said Ramkhelawan.

He pointed out that the budget was prefaced on an oil price of $70 a barrel and over the past few weeks the price has dropped from a high of $147 to below $90 a barrel.

Speaking on the issue of inflation, Ramkhelawan said a rate of 13.5 per cent is something that needs serious attention.

He said Government can take immediate steps such as paying more attention to agriculture.

"We have the available land, arable land and it is taking too long for us to get those lands into the hands of the right people to increase the supply of short term food crops," said Ramkhelawan.

Minister in the Ministry of Finance, Mariano Browne, who tabled the 2008/2009 Budget in the Senate yesterday, admitted that we live in turbulent times and cannot ignore the difficulties being experienced by the developed countries.

"The situation in the US, which if not expeditiously addressed, can have systematic contagion effects globally. This could exacerbate the effects of the rapid increases in the price of internationally traded commodities, in particular those that are used pervasively throughout the world, oil, food and steel," said Browne.

He added, however, that IMF economists still project positive world economic growth though at a much slower pace.

Browne said the fundamentals of this economy remain strong and sustainable.

He said there is a savings of US $2.46 billion in the Heritage and Stabilisation Fund, which is considerably higher than our external debt.