According to this year’s budget, which Finance Minister Dr Ashni Singh presented to the National Assembly on Monday, Guyana is projected to accumulate external debt amounting to $1,069.80B by December 31, 2010. This comes after the country’s external debt increased to US$933M, having grown by 12% during 2009. At the end of 2008, the country’s external debt had been pegged at $834.32M.
Singh said, “following a number of debt initiatives that resulted in a considerable reduction of the stock in recent years, increased multilateral and bilateral disbursements accounted for the bulk of the 12% growth.” However, he said that “even in the face of this growth in the debt stock, debt service payments declined by about 14% last year to US$17.5M.”
According to the minister, progress has been made in terms of reducing the country’s external debt. “Some progress has been made with our bilateral and non-Paris Club creditors and diplomatic and other efforts would be sustained in the search for a viable solution to reducing or eliminating the stock of outstanding debt to these creditors in line with our Paris Club obligations,” Singh stated.
He said Guyana’s debt “is expected to remain sustainable over the medium term” adding that “amidst rising debt levels in many other Caribbean territories, this would be a significant achievement.” However, he said that for this to be achieved, “Guyana will require continued access to concessional financing going forward.”
This year’s budget projects increased credit being received from non-Paris Club creditors. Total credit received from these countries is projected to increase from $320.44M to $425.83M by the end of this year. Credit from Venezuela is expected to increase from the $143.04M recorded at the end of 2009 to $225.58M by the end of this year. Credit from China is set to increase from the $32.37M at the end of last year to $49.30M by the conclusion of 2010.
Bilateral credit is slated to increase by the end of 2010 to $477.79M. At the end of last year, bilateral credit had been pegged at $375.22M, a relatively marginal increase from the $340.63M recorded at the end of 2008.
Meanwhile, Singh also noted that “the stock of government’s domestic debt increased by 16% in 2009 to $87B.” According to him, this reflected “an expansion in the insurance of treasury bills to sterilise excess liquidity consistent with the monetary policy objective. Commercial banks retained the largest share of outstanding stock of treasury bills with 76% up from 73% one year earlier,” Singh said.
The country’s total domestic debt service, Singh announced, has decreased by 28.7% to $4.3B from 2008 “as a result of redemption of debentures that saw a decline in principal payments even while interest charges increased on all maturities of treasury bills.”
