Introduction
GINA makes sure we are reminded that the G$208.8 billion budget is the largest ever presented in Parliament. No one there bothered to check whether this is indeed the case by deflating the nominal into real numbers. Nor did they bother to convert the G$208.8 billion into US$ terms, the preferred mode of comparison of Minister Ashni Singh. Guyana’s GDP grew at a reasonable 4.2% in 2012. This growth is coming mainly from sectors like gold, rice and bauxite that can witness a sudden reversal of fortunes. The forecast for 2013 is 5.3% that is likely to come mainly from a rebound in sugar, which will be emerging from a very low bottom. Nevertheless positive growth is always better than a stagnant or shrinking economy.
The budget reads to me like an election preparedness document. It proposes very little fundamental policies that will address the coming structural problems in the economy, particularly the expected ballooning of the external debt after 2016. And the large projects proposed will add significant fiscal risks in the coming years. Subsidies, tax credits and some tax reductions are proposed.