…as Ali highlights restoration of financial stability
President Dr Irfaan Ali has said that in under a year, the People’s Progressive Party (PPP) Government, through its policies and programmes, has been able to restore confidence in Guyana’s economy, evidenced by the fiscal indexes returning to some amount of stability.
The President was at the time addressing the Town Hall Forum on Friday, organised by the International Center for Democracy (ICD), in Richmond Hill, Queens, New York. During his virtual address, he spoke of Guyana’s Balance of Payments (BoP) deficit being fixed and reserves being restored.
“Our revenue target for the first half of this year has surpassed its projection by $11.3 billion, as a result of the growth of these (traditional) sectors. We have seen a 100 per cent improvement in our balance of payments deficit. We’ve been able to stabilise our reserve holdings and public debt to a sustainable level,” he said.
“We’ve seen great improvement in the labour market. And increase in Government transfers, that would see social goods being given to the people of our country. And more importantly, we have removed in an annualised manner, more than $50 billion of the tax burden that was imposed by the former Government on the people of the country.”
In addition, there are a number of projects that are scheduled to be brought into being by year end, particularly in the construction and hospitality sectors. The President also spoke of the restoration of investor confidence in the traditional economic sectors.
“The confidence in our economy and you would have noticed I’m not only speaking about oil and gas, in just 10 months in a COVID environment, has seen intense growth in agriculture, manufacturing, mining, construction, wholesale and retail.”
“In this COVID environment, where we’re also managing a horrible flood that has affected the lives of tens of thousands of our brothers and sisters, in which we had to deal with post-election issues,” the President said.
Prior to the PPP taking office in August 2020, it had been revealed that the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had left the General Reserves with a balance of $0.
In fact, the account was left with an overdraft to the tune of hundreds of billions of dollars.
The Bank of Guyana’s statement of Assets and Liabilities had revealed that the General Reserve was at -$290,667,332 in May 2020.
Additionally, Public Deposits were also depleted to below $0, also recording a negative balance of -$88,629,401,855. Guyana’s Contingency Reserve account had also reflected an alarmingly low amount of $2.3 billion. When APNU/AFC took office in May 2015, Guyana’s General Reserve had in its coffers just about $6 billion while the Contingency Reserve held $4 billion.
In its 2021 Outlook on the macroeconomic state of the economy, the Bank of Guyana had projected that the external current account for the Balance of Payments will improve largely due to oil exports coupled with higher export prices for gold and rice. The total receipts of foreign currency by Central Bank are estimated to increase to US$902.3 million while total payments are targeted at US$838.9 million.
Additionally, Central Government’s overall balance is anticipated to marginally improve to $90,285 million as economic activities pick up, leading to increased revenue earnings from taxation despite the anticipated growth in expenditure. The NFPEs overall deficit is expected to widen as the public enterprises slowly recover from the effects of the coronavirus pandemic.
“In particular, GuySuCo is anticipated to record an increase in both capital and current expenses as efforts continue towards increasing the capacity of the existing estates and reopening those that were closed,” the report had said.
It went on to detail that those monetary aggregates of reserve money and broad money are estimated to expand in 2021, with the former due primarily to increased net foreign assets of the Bank of Guyana while the latter is expected to stem from higher net foreign assets and Private Sector credit. (First published in the Guyana Times)
