Govt. spending sees increase during first quarter - Finance Ministry

Govt. spending sees increase during first quarter – Finance Ministry

Jul 21, 2016 News

In its most recent Monthly Economic Bulletin (MEB), the Finance Ministry noted that total Central Government expenditure reached $34.9 billion in the first quarter of 2016, compared to $25.8 billion during the same period in 2015.

According to the Ministry, this rise in expenditure of 34.3 percent was mainly attributed to an increase in non-interest and capital expenditure.

Non-interest expenditure refers to fixed operating costs that a financial institution must incur, such as anticipated bad debt provisions. Non-interest expenses can also include employee salaries and benefits, equipment and property leases, taxes, loan loss provisions and professional service fees.

Capital expenditure on the other hand speaks to money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

In the MEB, it was noted that total non-interest expenditure amounted to $30.7 billion in the first quarter of 2016, compared to the same period during 2015, representing an increase of 38.7 percent.

This increase, the report said, was mainly due to a rise in transfer payments of 139.8 percent. It said, too, that the increase in transfer payments is primarily attributed to the reclassification of the Constitutional Agencies to this category of expenditure as well as increases in old age pension, statutory pensions and gratuity, and payments to local and international organizations.

The Finance Ministry report said that employment cost increased by 3.2 percent due to the increase in wages and salaries awarded to public servants, effective July 2015. However, it was noted that there was a fall in other goods and services by 11.9 percent mainly due to a decline in materials and supplies.

Based on its analysis, the Ministry said that capital expenditure rose by 25.2 percent, reaching $2.6 billion in the first quarter of 2016, compared to $2.1 billion during the same period in 2015. It said that this increase in expenditure was mainly attributed to the rollover of several projects from 2015 and the early presentation of Budget 2016.

Additionally, the MEB said that several new projects are expected to commence during the second quarter of the year. It said that this process will have to be sped up if the budgeted total is to be achieved. Also, it was noted that interest expenditure increased marginally by 1.4 percent or $22.2 million, mainly due to an increase in external interest.

The MEB also reported on the performance of the nation’s exports and imports. The report said that exports in February rose US$18.69 million to US$99.35 million, or 23.2 percent.

Meanwhile, imports rose US$11.37 million to US$106.38 million in February.

With regard to gold exports, it was noted that this revenue earner increased by US$20.55 million to US$62.81 million in February.

The Monthly Economic Bulletin (MEB), which is produced by the Economic Policy Analysis Unit (EPAU) of the Office of the Budget, Ministry of Finance, provides a monthly update on some of the important developments within Guyana’s economy. The sectors covered in the MEB are Real, Fiscal, Monetary and External. The MEB also provides an update on the forecast of key economic variables within Guyana’s economy.