Finance Minister Dr Ashni Singh on Monday unveiled government’s record Gy$161.4 billion budget during a three-hour long presentation in the National Assembly
On the afternoon of Monday, January 17th, Finance Minister Dr Ashni Singh unveiled the 2011 National Budget in the National Assembly. The budget costs Gy$161.4 billion and contains measures such as the lifting of the tax threshold from Gy$35,000 to Gy$40,000 and the lowering of corporation tax. These measures are all aimed at lifting the national standard of living and allowing companies to retain and reinvest a significant share of their profits.
This year’s budget represents a 13.1 per cent increase over last year’s, and is reflective of Guyana’s steady economic growth, which was recorded at four per cent in 2010, Singh said. The minister disclosed that the Guyanese economy is larger than ever, and the country’s Gross Domestic Product (GDP) now stands at Gy$453 billion. This reflects a 3.6 per cent increase over 2010 figures. And, according to the minister, it represents positive growth for the fifth consecutive year.
“Of significant note is the fact that the expansion in output achieved in recent years has relied less on the traditional sectors and increasingly on new and emerging sectors, with the non-sugar economy growing by 4.3 per cent,” Dr Singh outlined. Notwithstanding global uncertainties, the economic performance for 2010 provided further evidence of the returns that (can) be derived from sound policies and sustained implementation, Dr Singh believes.
He told the House that inflation was contained to modest levels through 2010, with the change in the consumer price index at the end of the year amounting to 4.5 per cent. “While there were increases in some categories of food items during the year, these were rarely for any sustained period,” he added. “Government continued to apply concessional excise tax rates on fuel products, thereby helping to contain the ‘pass-through’ of upward movement in the world market oil prices.”
Further, the fiscal deficit of the non-financial public sector was contained at Gy$18.2 billion, or four per cent of GDP, notwithstanding scaled up investment in physical and social infrastructure. This, the minister believes, is a reflection of government’s continued “prudent management of public finances”.
Further, the balance of payment reflected an overall surplus of US$90.1 million at the end of 2010. “This strong and sustained macroeconomic performance has encouraged, and is simultaneously demonstrative of, increasing vitality from a private sector that is responsive to the favourable policy environment established by our government,” Dr Singh pointed out. As such, foreign direct investment totalled US$692 million, and credit by the commercial banks to the private sector grew at an annual average rate of 15 per cent.
2011 projections
“Mr Speaker, the economy is projected to continue to grow in 2011 by 4.6 per cent, with the non-sugar economy projected to grow by 2.8 per cent,” Dr Singh said. “On the other hand, the inflation rate is targeted at 4.4 per cent in 2011, and monetary policy will continue to support the expansion of private sector credit in an environment of low inflation and stable exchange rate”, the minister forecast.
In relation to the projected global food and fuel price increases, Dr Singh assured the National Assembly that Guyanese will continue to gain from investments made to assure food security, and the excise tax on fuel will continue to be regulated to moderate the ‘pass-through’ effect of the global increase in fuel prices. Meanwhile, the overall balance of payments is predicted to achieve a surplus of US$24.4 million, compared to US$90.1 million in 2010. This, the minister said, is attributed to a projected widening of the current account to US$385.6 million due to higher import commodity prices outweighing the projected higher export earnings.
As it relates to the non-financial public sector, current revenue is budgeted to increase by 3.9 per cent to Gy$112 billion.
A future today
Themed “Together building tomorrow’s Guyana today”, the budget is the largest in Guyana’s history. In his conclusion, the finance minister acknowledged that while much work has been done, more still needs to be done if the country is to reach its peak. “This is the reason Budget 2011 speaks of tomorrow’s Guyana, a Guyana where all of its citizens live in harmony; peacefully, productively and gainfully engaged; where there is no limit to what the young can achieve; where the elderly has no need that is not met…and where enterprise and hard work are justly and generously rewarded.”
According to the minister, the People’s Progressive Party/Civic (PPP/C) believes that this should no longer be a distant dream. As such, he is adamant that its achievement is dependent on the actions taken today. “And take them we must!” he declared.
Dr Singh also spoke of a vision that centres on sustainable use of land and the country’s resources; a vision that encourages closer partnerships and infrastructural links with neighbouring countries; one of affordable and clean energy, and a well educated and skilfully equipped workforce, with access to cutting-edge technology.
“Mr Speaker, each and every one of us has a contribution to make in realising this vision. And were we each diligently to do our part, tomorrow’s Guyana would surely be well on its way to being built today.”
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