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Guyana plunges 23% deeper in debt, country now owes US$4.5B

Jan 16, 2024 News

Kaieteur News – Guyana in 2023 plunged 23% deeper in debt, with the country now owing US$4.5 billion.

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh on Monday provided this update to the National Assembly while presenting the 2024 Budget. He said, “At the end of 2023, total Public and Publicly Guaranteed (PPG) debt stood at US$4,508.8 million, up 23.4 percent from the position at the end of 2022, on account of new external and domestic borrowing.”

At the end of 2022, the country’s debt stood at US$3,654.9 million.  According to the Minister, Guyana’s external debt amounted to US$1,775.5 million at the end of 2023, up 13 percent from the position at the end of 2022.

Meanwhile, domestic debt reached US$2,733.4 million at the end of 2023, up from the US$2,083 million at the end of 2022. This increase was attributed to the Government’s issuance of new Treasury Bills.

Dr. Singh highlighted that the country’s debt service also increased in 2023. Some US$177.3 million in revenue went towards debt service last year, up from US$150.2 million in 2022. This increase was driven by both domestic and external debt service payments. Domestic debt service payments totalled US$76.4 million in 2023, up from US$65 million in the preceding year. According to Dr. Singh, “The growth of domestic debt service payments was due to a full year’s worth of principal repayments on debentures issued in 2021 to securitise an inherited overdraft at the Central Bank.”

External debt service payments rose from US$85.2 million in 2022 to US$100.9 million in 2023, on account of higher principal and interest payments to official (multilateral and bilateral) creditors.

Nevertheless, the Finance Minister boasted of Guyana’s low Gross Domestic Product (GDP) to debt ratio and prudent debt management. He told the National Assembly, “Our Government remains steadfast in its commitment to maintaining a strong debt sustainability position for Guyana. The Government 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. As the Government’s borrowing expands in line with the PSIP (Public Sector Investment Programme), such borrowing is done in a manner that Guyana continues to enjoy strong debt sustainability fundamentals not only for the next year but for generations to come.”

He boasted that Guyana maintains one of the lowest ratios of total Public and Publicly Guaranteed (PPG) debt-to-GDP in the Caribbean Region. “Guyana’s total PPG debt-to-GDP was 27 percent at the end of 2023. This sustainable level of total PPG debt reflects the Government’s effective debt management practices which have contributed to a steady decline in the country’s debt ratios over a sustained period.”  Dr. Singh added that Guyana enjoys considerable space to absorb macroeconomic shocks without debt sustainability being compromised.

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