Government moves to Adjust Debt Ceiling as Development Agenda Accelerates
–Places Guyana in a position to achieving sustainable development by pursuing a transformative development agenda
–We borrow to invest in what matters and have demonstrated strong debt management abilities
The Government has outlined an ambitious programme of development aimed at transforming Guyana and delivering improved quality of life to all Guyanese, which will require new financing including through additional external and domestic debt.
Against this backdrop, the Government of Guyana moves to adjust the debt ceilings as its development agenda accelerates. In line with the Government’s commitment to maintaining its sterling track record of transparent and prudent debt management, the increase in the debt ceilings aims to avert the dependency on utilising the Consolidated Fund overdraft as a means of financing, which was done under the APNU/AFC administration.
On Thursday, the Honourable Dr. Ashni Singh, Senior Minister in the Office of the President with Responsibility for Finance, tabled two orders in Parliament proposing adjustments to the two ceilings. It was proposed that the domestic public debt ceiling be increased to $750 billion, up from $500 billion from its last revision. Meanwhile, a new external borrowing ceiling of $900 billion was proposed, after its last increase to $650 billion.
Given Guyana’s economic outlook, these revisions to the external and domestic public debt ceilings do not threaten Guyana’s long-term debt sustainability. Noteworthy, for more than one and a half decades Guyana has maintained a robust debt sustainability position. This favourable outcome was due to the PPP/C’s administration’s strong debt management abilities. This administration focuses on debt management policies and practices that hinge on a strategy that prioritises mobilising development financing at the lowest cost, within prudent risk parameters.
Guyana’s history serves as a testimony of this administration’s ability of achieving and maintaining sustainable debt levels. When this Government took office in 1992, Guyana was one of the world’s most heavily indebted countries, however, after several rounds of successful debt relief initiatives coupled with the Government’s continuous efforts to strengthen the domestic economy, Guyana’s debt became sustainable in 2006. Over the last three decades, Guyana’s debt has declined from 617 percent of GDP (more than six times the economy) at end-1991, to a remarkable 24.6 percent (about a quarter of the economy) at end-2022. Additionally, when this Government took office in 1992, about 90 cents of every dollar of revenue earned was used to make debt service payments, today this has been significantly reduced to 7 cents of every dollar.
Fuelled by a ramping up of oil production and the resurgence of the non-oil economy, Guyana registered real GDP growth of 62.3 percent in 2022, making it the fastest-growing economy in the world. This appreciable growth performance and the country’s robust economic outlook underpin Guyana’s sustainable absorption of the new debt.
In sum, the Government is committed to harnessing Guyana’s debt-carrying capacity to accelerate its development agenda. Notwithstanding this administration endeavours to continue its sterling track record of prudent debt management, to safeguard Guyana’s long-term fiscal integrity and debt sustainability.