Guyana’s economy is projected to expand by 5.3 per cent in 2013 and inflation is expected to be contained at 4.3 per cent, with VAT collections expected to outstrip last year’s performance by almost eight per cent, Minister of Finance Dr Ashni Singh announced yesterday.
During his presentation of the government’s proposed $208.8 billion 2013 national budget in the National Assembly, Singh said the fiscal projections are in comparison with growth in 2012 of 4.8 per cent, coupled with an inflation of 3.5 per cent that year.
According to Singh, central government’s current revenue (net of GRIF inflows) is estimated at $142.8 billion, an increase of 10.3 per cent. He attributed this to a 6.3 per cent increase in Guyana Revenue Authority (GRA) tax collections to $125.7 billion.
He said internal revenue collections are projected at $50.4 billion, 3.8 per cent above 2012 level, primarily due to projected increased payments from private sector companies and the self employed.
Value added and excise taxes are estimated at $61.3 billion, a 7.7 per cent increase, while customs and trade taxes are projected to expand by 9.1 per cent to $14 billion.
Government expects that its total expenditure will be $205.1 billion—a 19.7 per cent increase over 2012—and capital expenditure is projected to expand by over 50 per cent in 2013 to $85.7 billion. This, Singh said, is primarily associated with investments in GPL and government’s equity contribution to the Amaila Falls Hydro Project.
He also said that balance of payments in 2013 is expected to be US$57.6 million, compared to $12.4 million in 2012 and current account deficit to expand to US$451.9 million.
In giving his projections for various sectors, the minister said sugar production is projected to be 240,000 tonnes and he said while this was lower than the industry’s original projection of 260,709 tonnes for the year, it would still require diligent application and management across the industry to achieve.
In contrast, rice is expected to continue along its path of growth as the benefits of investment in the sector and improved yields and management practices continue to accrue. The sector is now projected to record 440,106 tonnes or 4.3 percent over the production of 2012.
The livestock industry, Singh said, is projected to achieve four per cent growth, having adjusted to the surge in demand last year, while the fishing industry is estimated to expand by two per cent, sustained by guaranteed domestic and export markets for seafood products.
He did, however, note that the forestry sector is projected to decline by 5.6 per cent.
In the mining and quarrying sector, growth is projected at three per cent for this year, with gold expected to yield 450,031 ounces this year, representing a 2.6 per cent expansion in output.
2012 review
Last year, Singh said, central government’s revenue grew by seven per cent to $129.4 billion and tax revenue, which represented 91.5 of this, amounted to $118.3 billion—6.2 per cent over 2011.
Internal revenue collections increased by 2.9 per cent to $48.6 billion in 2012, with VAT and excise tax collections increasing by 7.2 per cent to $56.8 billion, with increased VAT collections from imports and domestic supplies, and increased excise tax collected on all categories of taxable goods except fuel.
The balance of payments at the end of 2012, he added, reflected a surplus of US$12.4 million, compared to a deficit of US$15 million in 2011 and he attributed this to higher foreign direct investment.
Meanwhile, Singh noted that export receipts from sugar grew by 7.1 per cent to US$132.1 million, due primarily to favourable contract prices, which increased by 15.1 per cent and countered a 6.9 per cent reduction in volume. He reported that overall, export earnings expanded by 23.6 per cent to US$1.5 billion in 2012.
Rice export receipts grew by 13.3 per cent to US$196.2 million; gold exports amounted to US$716.9 million, a 38.7 per cent increase over 2012, with the industry benefiting from a 6 per cent favourable price movement and a 30.8 per cent increase in export volume. In addition, bauxite exports increased by 13.1 per cent to US$150.8 million, with volumes increasing by 22.8 per cent.
However, timber exports totalled US$39 million, a marginal decline of 0.1 per cent, primarily associated with lower production and stronger forest monitoring and enforcement.
Singh reported that the Bank of Guyana ended the year with total external reserves of US$862.2 million, equivalent to four months of imports.
He said that the non-financial public sector recorded a fiscal deficit of $26 billion or 4.5 per cent of GDP, almost the same as 2011 which saw a deficit of 4.4 per cent.
Singh disclosed that at the end of 2012, Guyana’s total external debt stood at US$1.4 billion, which represented an increase of 12.7 per cent over the previous year.
He noted that towards the end of 2012, Guyana signed its first debt compensation agreement with Venezuela, which reduced the PetroCaribe debt owed by US$100.8 million, equivalent to the value of rice and paddy shipped from December 2009 to July 2011.
“Government expects to conclude imminently a second debt compensation agreement which will reduce the PetroCaribe debt to Venezuela by a further US$186 million, equivalent to the value of rice and paddy shipped from July 2011 to January 2013,” he said, while noting that Guyana also finalised bilateral debt relief negotiations with the Russian Federation last year to write off 100 per cent of the outstanding debt owed to that country.
