Minister of Finance Dr Ashni Singh yesterday announced that the economy is projected to grow by 4.6% this year as he unveiled a $161.4 billion national budget in the National Assembly.
Addressing the House for just over three hours, Dr Singh said the country’s economy was larger than ever with gross domestic product (GDP) now measured at $453 billion.
This year’s budget is 13.1% higher than last year’s budget and the largest budget in the country’s history, he said.
The central government’s revenue collection is projected to increase by 3.9% to $112 billion, he said, while noting that the Guyana Revenue Authority would be contributing $104.4 billion. “Customs and trade taxes are projected to collect $10 billion representing an 8.3% increase primarily attributed to higher import duty collections arising from higher import volumes after allowing for the impact of implementing the EPA provisions,” Dr Singh added.
Cariforum countries are scheduled to begin the liberalisation of tariffs on goods this month following a three-year grace period from the EU on the Economic Partnership Agreements.
Internal revenue collections are targeted to increase by 1.9% to $44.1 billion reflecting improved performances in the self employed category and PAYE he said, with the VAT and Excise Tax projected to increase by 3.9% to $50.2 billion. This, he said, was due primarily to higher collections on imports and on domestic supplies due to increased external and domestic trade activities. “Non-tax revenues are projected to increase by 11.2% to $7.7 billion primarily on account of higher Bank of Guyana profits. Mr Speaker, total expenditure is projected at $157.7 billion, an increase of 18.4% over the 2010 level. Of this, current expenditure is projected to grow by 10.6% to $95.5 billion while capital expenditure is projected to increase by 33% to $62.1 billion,” Singh said.
The growth of non-interest current expenditure is primarily attributed to the cost of conducting general and regional elections in 2011, he explained, with the Guyana Elections Commission’s current allocations to be increased by $2 billion. He added that the growth in capital expenditure is mainly due to heightened activity in a new project that is coming on stream though he did not provide any details on it.
Singh also said that external reserves now stand at US$780 million compared with US$277 million at the end of 2006. “External debt has been reduced from 72% to 47% and the fiscal deficit from 7.2% to 4% of GDP while the percentage of Central Government expenditure financed with our own domestic revenues has been increased from 60% to 81%, all over the past four years,” he stated.
The minister added that foreign direct investment totalled US$692 million while credit by the commercial banks to the private sector grew at an average annual rate of more than 15%. “The economy is projected to continue to grow in 2011 by 4.6% with the non-sugar economy projected to grow by 2.8%,” Singh said, while adding that the inflation rate was targeted at 4.4%.
According to him, the overall balance of payments is projected to achieve a surplus of US$24.4 million compared to US$90 million at the end of 2010. “This is attributed to the projected widening of the current account to US$385.6 million due to higher import commodity prices outweighing projected higher export prices,” he said, adding that “the capital account is projected to improve by US$84.2 million to US$410 million as the level of official disbursement is expected to increase significantly.”
No new taxes were announced in the budget.
