-growth projected at 10.6%
-US$2.5b in oil revenue to be spent this year
By Milton Grannum
Finance Minister Dr Ashni Singh yesterday presented a $1.382t budget, 20.6% bigger than last year, and a whopping US$2.5b in oil money will be injected into the Consolidated Fund this year but GDP growth will be around 10.6% compared to the stratospheric 43.6% last year.
“A secure prosperous and sustainable Guyana” was the theme of the presentation.
Starting at 2:52 pm and concluding at 7:57 pm, the 5 hours 5 minutes’ presentation saw Singh declaring that the budget comes just short of “8 months before this 12th parliament of Guyana will be dissolved in anticipation of general and regional elections. These elections will be held before the year is over”.
He noted that in 2024 Guyana’s economy is estimated to have grown by 43.6 percent overall while the non-oil economy saw an expansion of 13.2 percent.
“The growth in the overall economy reflects continued strong expansion in oil output, while growth in the non-oil economy is driven primarily by increases in rice, other crops, and bauxite production, along with expansion in other mining and quarrying as well as in the construction and services sectors. This highlights Guyana’s emergence as a key player in the global energy market but also underscores the stellar successes being achieved in building a diversified economic base”, Singh asserted.
The agriculture, forestry and fishing sector “is estimated to have grown by 11 percent in 2024, with the performance being mainly attributed to increases in other crops, livestock, and rice growing, with smaller increases in forestry and fishing. He stated that “growth in the subsectors more than offset the contraction recorded in sugar growing, and that “the sugar growing sector is estimated to have contracted by 21.8 percent in 2024”, with the Guyana Sugar Corporation (GuySuCo) producing 47,103 metric tonnes in 2024. This reflects the impact of El Niño, compounded by labour shortages across the industry throughout the year, he stated.
APNU+AFC MP with oversight for the agriculture sector Vinceroy Jordan, heckled What!
For the rice growing sector he cited a strong expansion of 9.3 percent estimated for 2024. The Guyana Rice Development Board (GRDB) has reported rice production at 725,282 metric tonnes, compared with 653,706 metric tonnes in 2023. He stated that “This performance can be largely attributed to better yields, which improved to 6.6 metric tonnes per hectare in 2024 from 6.3 metric tonnes per hectare in 2023, with some producing regions having yields averaging above 7 metric tonnes per hectare”.
The other-crops subsector he stated also recorded growth of 10.9 percent in 2024. Significant growth was recorded in the production of vegetables, fruits, root crops, beans and cereals, coconuts and spices, largely on account of increased acreage. Livestock industry expanded some 24.6 percent in 2024, with growth observed across all subcategories. Based on the latest available estimates, the production of poultry, pork, beef, eggs and milk grew by 31 percent, 35.3 percent, 6.9 percent, 7.6 percent and 6.4 percent, respectively.
Mortality rates
This, Singh attributed to “a reduction in mortality rates following vaccination against the viral disease affecting chickens, the country wide distribution of baby chicks and the acceleration of the Guyana Livestock Development Authority’s (GLDA’s) breeding programme”.
With continued support from the Government’s side, by the customary drumming of the tables, those increases were well received and celebrated while members from the Opposition’s benches continued heckles about their track record.
The fishing industry recorded an estimated expansion of 1 percent in 2024, attributed to growth in both marine production and production in the aquaculture industry. Within marine production, shrimp production expanded by an estimated 8.5 percent, outweighing the 2.2 percent contraction estimated for fish production. While improvements were observed in the production of artisanal and industrial finfish, the production of red snapper contracted. Aquaculture production expanded by 13.7 percent in 2024 in total, with growth of 19.1 percent in the production of brackish water shrimp.
The forestry sector is estimated to have grown by 4.6 percent, mainly driven by growth in logs, roundwood and sawn wood production.
The mining and quarrying sector expanded by 55.9 percent in 2024.
The oil and gas sector saw an estimated production of “225.4 million barrels of crude oil in 2024, expanding the oil and gas sector expanded by “57.7 percent in 2024”. APNU+AFC MP Khemraj Ranjattan shouted “yall get all the money you want”.
Singh continued that growth in the sector was driven primarily by the “ramp up” in production on the Prosperity Floating Production Storage and Offloading (FPSO) platform which started producing oil in November 2023 while the Stabroek Block produced oil at a rate of 616,000 barrels per day, with the Liza Destiny producing an average of 149,000, the Liza Unity 231,000.
Mining recorded growth at 0.5 percent in 2024 with total gold declarations amounting to 434,067 ounces, bauxite by 48.4 percent. He however noted that “having faced operational challenges for most of 2024, output from the operator in Bonasika fell from 207,321 metric tonnes in 2023 to 173,970 metric tonnes last year”. The other-mining subsector, including sand, stone, diamonds and manganese is estimated to have grown by 50.5 percent in 2024.
Pausing for a drink of water, Singh reiterated words heckled by Natural Resources Minister Vickram Bharrat that “they are poised to bounce back”.
Manufacturing saw an expansion of 13.5 percent with rice expanding by 15.7 percent and 13.9 percent, respectively, while sugar manufacturing is estimated to have contracted by 21.8 percent.
Construction
The construction sector grew by 30.8 percent while the services sector expanded by 7.5 percent “with growth recorded across all service industries”.
He noted that “the 2024 performance was primarily supported by growth in administrative and support services, financial and insurance activities, wholesale and retail trade and repairs, real estate activities, and professional, scientific and technical services. These industries grew by 9.3 percent, 13.3 percent, 7.1 percent, 3.3 percent and 31.5 percent, respectively”.
Balance of payments recorded an estimated surplus of US $113.8 million at the end of 2024, while the merchandise trade balance registered a surplus of US $13 billion, exceeding the US$6.5 billion surplus in 2023. This was driven by a significant increase in crude oil exports and strong performances in non-oil exports. This saw total export earnings increasing by 50.7 percent to an estimated US$ 19.8 billion in 2024.
Inflation for 2024 was recorded at 2.9 percent, “driven primarily by food prices, which rose by 5.6 percent and contributed 2.8 percentage points of the overall rate. Within food, vegetables and vegetable products accounted for 1 percentage point, while meat, fish, and eggs and cereals and cereal products contributed 0.7 of a percentage point and 0.6 of a percentage point, respectively”. Singh stated.
Import payments grew by 2.7% to US$6.8 billion, with intermediate and consumption goods imports rising by 20.4% and 20.6%, respectively, Net Service Payments increased by US$1.8 billion to US$7.8 billion, while transfers declined by US$277.4 million. This attributed to reduced remittances.
Meanwhile a deficit of US$59 billion was recorded, primarily due to reduced foreign direct investment and increased deposits in the Natural Resource Fund, which grew from US$1.6 billion in 2023 to US$2.6 billion in 2024. The Bank of Guyana’s reserves rose to US$1 billion by the end of 2024.
Money supply
Money supply expanded by 25.3%, Private Sector Credit Increased by 19.8%, Real Estate Mortgages by 21.1%, Household Credit by 25.7%, while Non-performing loans dropped significantly to 1.8% in 2024.
He noted that total reserves at the Bank of Guyana grew by 18.3%.
By the time Singh was ready to begin highlighting projections and expected growth for 2025, part of the session saw controversial Deputy Speaker Asha Kissoon presiding over the House, with Singh referring to her as Mr. Speaker not realizing that Speaker Manzoor Nadir stepped out. He apologized several times for the error. Opposition members heckled “Ashni you tired” while member Annette Ferguson heckled “Mrs. speaker” in a sarcastic manner.
2025 is expected to see the real Gross Domestic Product (GDP) growing by 10.6 percent “at which rate we are still expected to be the third fastest growing economy in the world”. The non-oil economy is projected at 13.8 percent.
The mining and quarrying sector is projected to expand by 10 percent.
“The three existing FPSOs and the One Guyana FPSO in the Stabroek Block are projected to achieve production of crude oil of 674,000 barrels per day this year, with an expected ramp up to an average of 786,000 bpd in the fourth quarter of 2025. This supports the subsector expanding by an estimated 9.5 percent this year. Additionally, the other mining and quarrying subsector is anticipated to continue its strong performance this year, with projected growth of 29.8 percent. This reflects robust growth continuing in infrastructure investment through the PSIP, combined with intensified activity in private sector construction”.
He added that “the gold and bauxite mining subsectors are expected to expand further, to grow this year by 17.2 percent and 70.1 percent, respectively”, while manufacturing will grow by 13 percent.
Monetary policy
“Monetary policy this year will remain focused on containing inflationary pressures and maintaining exchange rate stability. These objectives will be pursued within a policy framework designed to support robust and sustained growth in private sector credit and the domestic economy. With this in mind, the 12-month inflation rate for this year is projected to be largely in line with 2024 at 2.8 percent”.
Additionally “the overall balance of payments is expected to record a higher surplus of US$61.3 million in 2025, largely attributed to improvements in the capital account, with the deficit. Reducing by an estimated US$4.2 billion. The current account is anticipated to register a surplus of USS2.3 billion this year, with a merchandise trade balance of US$10.8 billion. Within this, non-oil exports are projected to expand by 20.7 percent to USS2.2 billion, largely on account of higher earnings from gold, bauxite, and rice. At the same time, export earnings from crude oil are anticipated to decline by 2.1 percent to US$17.6 billion, on account of lower market prices for crude oil expected this year. Total import payments are projected to increase by 32.3 percent to US$9 billion in 2025, primarily driven by the arrival of the One Guyana FPSO, which is expected to arrive in the second half of the year. The capital account is forecasted to record a deficit of US$1.7 billion, largely due to an anticipated increase in FDI inflows, higher disbursements, and higher NRF inflows in 2025”. He stated.
“It is anticipated that the Central Government’s current revenue, net of NRF withdrawal, GRIF, and Carbon Credit inflows, will increase from $437.7 billion to $454.6 billion in 2025.
Tax revenues are expected to contribute 95.5 percent of this sum, amounting to $434.1 billion. Internal revenue collections are projected to grow to $271 billion, while customs and trade tax collections are expected to reach $43.1 billion. Moreover, VAT and excise tax collections are expected to grow by 6.4 percent to $120 billion. Non-tax revenues are expected to reach $20.5 billion in 2025.
In addition to the transfer of $512.4 billion from the NRF, the sale of carbon credits is expected to generate an estimated $41.1 billion in revenues.
“Central Government’s overall spending is projected to increase by 16 percent in 2025. This is on account of an accelerated implementation of critical investment projects and programmes including the New Demerara River Crossing, six regional hospitals, and progressing works on major highways including New Amsterdam and continuation of Heroes Highway to Busby Dam just to name a few. To this end capital expenditure is projected to increase by $91.6 billion while non-interest current spending will increase this year by $87.2 billion when compared to the 2024 level. The overall deficit after grants of the Central Government is projected at $317.8 billion, or 5.9 percent of GDP. Total receipts of public enterprises in 2025 are anticipated to increase to $233.1 billon. The expenditure for the enterprises is expected to grow by $37 billion, with operating cost growing from $181.8 billion last year, to $211.3 billion this year”
Capital expenditure is projected to increase by $6.5 billion.
He noted that “GuySuCo will continue its mechanization projects of the grinding estates, and GPL is expected to upgrade substations, install efficient transformers and transmission to improve secondary voltage and the second power ship to supply 75 megawatts in 2025”.
The overall surplus of the public enterprises is forecasted at 57.4 billion, equivalent to 0.3 percent of GDP. Projections show a S310.5 billion deficit, or 5.7 percent of GDP for the non-financial public sector in 2025.
Focusing on projections on the oil and gas sector Singh highlighted that it is anticipated that there will be 246 lifts of profit oil from the Stabroek Block.
“It is also projected to have 31 lifts of profit oil (for Guyana) from the three FPSOs along with the One Guyana FPSO which is expected to be commissioned in the second half of this year.
However, with the average price of Brent crude expected to decline to an average of US $71.9 per barrel, “Government’s petroleum revenue deposits are projected to be 2.6 percent lower than in 2024. Government is projected to earn an estimated US$2.2 billion in profit oil and US$340.6 million in royalties. Further, based on the 2024 petroleum deposits, an estimated USS2.5 billion can be withdrawn from the NRF and transferred to the Consolidated Fund to support national development priorities in this year’s Budget”, he stated.
The presentation saw mixed reactions from the opposition with them applauding some measures by way of heckling, while the Government’s side supported all the growth and projections. Singh’s presentation was replete with attacks on the former APNU+AFC government.
Parliament has been adjourned to Friday when the budget debate is expected to begin.
