2020 Policy Issues and Targets

■ Current account deficit of US$1,802.8 million, compared to a deficit of US$1,438.8 million in 2018; and a surplus of US$ 463.6 million in the capital account, compared to a surplus of US$376.2 million in 2019.

■ Current revenue of $240.6 billion compared with $217 billion in 2018, an increase of 10.86% and an increase of $2.358 billion or 0.95% from budget of $238.3 billion. Current expenditure exclusive of interest $ 207.7 billion, an increase of 8.67% over 2018.

■

Increase in merchandise exports of US$190 million surplus or 13.8% during 2018, to US$1.567 billion. Merchandise imports increase by US$608.9 million or 25.25% to US$3,019 million.

Capital expenditure of $66.3 billion compared with budget of $69.2 billion.

■ Overall fiscal deficit of $40.02 billion compared with budgeted amount of $

52.15 billion in 2018.

■ Gross external reserves of Bank of Guyana at the end of 2019 of US$ 575.9 million, a decrease from US$528.4 million in 2018, or 1.6%. This represents 1.8 months of import cover.

2020 Targets

Size of the Budget:

■ Real GDP is expected to grow between 48.4% and 51.2% driven by the oil economy. The non-oil economy is expected to contract between 1.4% and 4.3%. In the first half of 2020, non-oil GDP declined by 4.9% while the oil sector grew by 45.9%.

Inflation between - 0.23% and +0.7%.

$329.5Bn, 28.8% increase

■ Balance of Payment deficit of $21 million compared with $48.9 million in

2019.

■ Merchandise exports to increase by 58.4% or US$2,482.9 million and imports

to reduce by 22.6% or US$2,338 million.

Introduction

The rather extensive sub-theme of the 2020 Budget was “Protecting our People in a COVID-19 Environment, Strengthening Democracy and the Rule of Law, Incentivising Growth and Job Creation, Enhancing Welfare”. The theme itself was Our Plan for Prosperity. The APNU+AFC Government similarly had an extensive subtheme under the theme the Good Life. The Agenda of the Government was presented under fifteen headings and making up more than half of the Minister’s speech.

The two central objectives of the Agenda were identified as a) containing of the pandemic, strengthening our public health response and capability, and b) simultaneously finding avenues for stimulating economic growth.

1.

The updating of the constitution, the establishment of the Ministry of Parliamentary Affairs and Governance, and the re-establishment of the Ministry of Local Government. See Ram & McRae Comment #2.

3.

Macroeconomic Outlook

The review and update of medium and long-term strategies of Budget Agencies in light of the health and economic crises resulting from the pandemic grounded in the tenets of the Low Carbon Development Strategy (LCDS).

Decreasing reliance on debt, having regard to the volatility inherent in petroleum revenues and a conservative ramp up in spending of new revenue. See Ram & McRae Comment #1.

Improved Governance and Institutional Reforms

Public Administration and Public Financial Management

Job creation through human resource management and equal access via scholarships; using technology to improve public administration; reducing the complexity of doing business in Guyana and improving transparency in the procurement process; reducing financial volatility; maintenance of the resilience of the Banking Sector; reviewing and full implementation of the Law Reform Commission; and review of the AML/CFT structure.