$350B in loans to fund 2025 budget-Jagdeo
Jan 24, 2025
Kaieteur News-The $1.382 trillion 2025 National Budget will be funded by over $350 billion in loans, Vice President Bharrat Jagdeo said on Thursday.
He made the comments during his weekly press conference at Freedom House.
Asked what percentage of the budget that will be funded by loans, the Vice President said that if one takes a look at the oil and non-oil revenue there is a table in the estimates under the heading ‘Public Sector Financial Operations’ which will give a breakdown of how the funds are accumulated.
Vice President, Bharrat Jagdeo
The VP said, “basically, if non-oil revenue is about 500 billion, billion dollars, and non-oil revenue if you include inflows from GRIF and the LCDs, would be another 500 million. So that means about three, 300 odd billion would be funded through loans. So just read, read it there.”
“You would see it here, public sector financial operations, and you can see how much of the revenue, or the exact figures would be $454B, in revenue, plus $16 billion of GRIF in flows, about $41 billion from carbon credit inflows, which will give about $511B and then $512B is from NRF withdrawal. So, that is a trillion dollars…” Looking at the estimates it shows that $349.98B will be accumulated from financing which represents roughly 25.25% of the budget. Giving a breakdown of the financing external financing represents $322.44b while $27.5B will be domestic financing.
Despite commencing oil production in 2020, the Government of Guyana (GoG) has grown the country’s debt by a significant US$4.2B as at the end of December 2024. In 2019, the country’s debt was US$1.8B. According to Annual Reports from the Bank of Guyana (BoG), the nation’s debt grew by 46.7% in 2020 to US$2.6B.
In 2021, the debt surged to US$3.1B, and in 2022 this trend continued with the total stock of debt climbing to US$3.7B. In 2023, debt increased further by 23.4% to US$4.5B while this grew to a massive US$6B at the end of 2024, as indicated by Finance Minister, Dr. Ashni Singh last week. The Irfaan Ali-led administration has often touted the low GDP to debt service ratio, meaning that the country’s Gross Domestic Product (GDP) far outweighs the country’s annual payment repayment on loans.
For instance, Dr. Singh pointed out the country’s progress over the past four years in this regard. He said, “Importantly, over the last four years, the ratio of total PPG (Public and Publicly Guaranteed Debt) debt-to-GDP plummeted by more than 20 percentage points, from 47.4 per cent at the end of 2020 to 24.3 per cent at the end of 2024. This provides clear indication of a marked improvement in Guyana’s capacity to maintain public debt into the future, without the need for fiscal adjustments, and places Guyana in the position of having one of the lowest debt-to-GDP ratios worldwide. Indeed, the latest available statistics rank Guyana as having the second lowest debt-to-GDP ratio within the Western Hemisphere in 2024.”
It should be noted that the country’s growth, its GDP, while largely reflective of exports from the petroleum sector, is not the real value that the country received from the sector. In fact, only on Sunday Kaieteur News reported that exports from the oil and gas sector totalled US$18B while Guyana only received US$2.6B in 2024 in the Natural Resource Fund (NRF).
($350B in loans to fund 2025 budget-Jagdeo)
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