Guyana records ‘significant’ decrease in public debt – ECLAC report

A recent report published by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), has outlined that public debt in Guyana has decreased significantly.

ECLAC’s ‘Financing a sustainable transition: investment for growth and climate change action’ stated that Guyana’s debt is approximately 24.7 per cent of GDP, as of December 2022.

ECLAC stated, “As in Latin America, the upturn in economic growth generated a strong denominator effect since public debt levels remained broadly stable in absolute terms during the year. In this regard, there were significant reductions in Belize, Barbados, Guyana and Jamaica.”

According to the report, central government gross debt in the Caribbean represented 77.9 per cent of GDP in December 2022. In some countries, this debt represented 100 per cent of the GDP, for example in Barbados and Suriname.

Importantly, Guyana’s economic standing has leapfrogged in recent years, to a point where the country has one of the lowest debt-to-GDP ratios in the world, guided by the government’s prudent financial policies.

In August, the government moved to adjust the limit of external loans from $650 billion to $900 billion, and the limit of public loans from $500 billion to $750 billion.

Defending this move at the time, Senior Minister within the Office of the President with Responsibility for Finance, Dr Ashni Singh, said that the adjustment is crucial to the country’s development, especially against the backdrop of the PPP/C government’s stellar track record in the ‘maintenance, preservation and strengthening of debt sustainability’.

The minister reminded that, in 1992, Guyana’s debt was approximately over 900 per cent of its GDP. At that point, the country was deemed uncreditworthy. Upon assuming office in 1992, the PPP/C government set about restoring Guyana’s economic viability, and today, those efforts continue to yield results. By 2015, the nation’s debt has drastically reduced from 900 per cent to around 45 per cent of the GDP.

Additionally, the ECLAC report noted that Guyana’s inflation rate was among the lowest in June 2023, when compared to the end of 2022, at 1.9 per cent.

“The largest reductions were recorded in Chile, Costa Rica, Guatemala, Guyana, Honduras and Trinidad and Tobago, where inflation was down by more than 4 percentage points,” it said.