Comprehensive cost of living measures bringing relief to Guyanese

Since taking office in 2020, the PPP/C Administration has implemented various initiatives to mitigate the impact of rising global food prices on Guyanese households.

A recent Bank of Guyana Report indicated that food prices have increased by 3.2 per cent in the first half of 2024 due to a number of factors that cannot be considered in isolation, the government said. 

For example, according to the mid-year report by the Bank of Guyana, food prices are impacted by a combination of domestic and global factors, including increased demand spurred by economic growth and population dynamics.

The report added that the global economy is still reeling from the lingering effects of the COVID-19 pandemic, combined with major disruptions in supply chains due to the ongoing geopolitical tensions in Eastern Europe and the Middle East.

During a recent live broadcast, President, Dr Mohamed Irfaan Ali explained that in the European Union, food price inflation climbed from 3.5 per cent in January 2022 to 7.5 per cent in May of the same year.

Latin America and the Caribbean experienced an even more dramatic surge, with food prices increasing by 81.6 per cent between January 2022 and September 2023.

By contrast, Guyana’s food inflation rate remained relatively low at 3.8 per cent in 2023.

The president outlined several measures implemented by his administration aimed at stimulating increased food production, while introducing assistance programmes to cushion the effects of this global phenomenon.

This includes the removal of value-added tax (VAT) on fertilisers, agrochemicals, pesticides, and key inputs in the poultry industry, at an annual estimated cost of $262 million.

“We removed VAT on machinery and equipment used by farmers in the agriculture sector. This is to advance mechanisation, increase productivity, and reduce the cost of production. We established a broiler breeder facility so that we can have more, instead of having the full effect of the imported inflation on hatching eggs. We are now developing the capacity and capability to produce our hatching eggs here in Guyana, so we will save that foreign currency, and reduce that imported inflation also,” the president explained.

An additional cost of living measure included the restoration of zero-rated status to all food items and other basic household necessities such as wheat flour, basic breads, and oats.

These initiatives are yielding returns, noted the Bank of Guyana’s report. It highlighted a 19.8 per cent increase in rice production, supported by innovative technologies like drones and geographic information systems.

A 27.7 per cent growth in the fishing industry, especially the dramatic 153 per cent increase in prawn production due to government investment, were also highlighted in the report.

Additionally, through the government’s part-time jobs initiative, critical support is being extended to families experiencing financial challenges.

To boost the income of many households, the government implemented several other financial measures.

These included reinstating the ‘Because We Care’ cash grant, which provided over $22 billion to parents in the last four years.

Additionally, old age pensions and public assistance were increased by more than 75 per cent and 111.1 per cent respectively, resulting in over $13.4 billion and $2.8 billion being distributed to these beneficiaries.

Furthermore, the one-month tax-free bonus for the disciplined services was reintroduced, providing an additional $4.1 billion.

Last year, a $5 billion cost of living allocation saw public servants, teachers, and members of the disciplined services, as well as staff of semi-autonomous agencies and public enterprises, receive a $25,000 one-time tax-free cash grant in December 2023, a $1.7 billion investment.

Looking ahead, budget 2024 includes a $7 billion cost of living allocation.

President Ali is expected to address the National Assembly in the coming days on how the government is planning to utilise the funds.

Over the course of the last four years, the government has increased disposable income for Guyanese by almost $200 billion, reflecting its dedication to alleviating financial burdens and improving the standard of living for everyone.