— ECLAC 2019 Economic Survey

GUYANA’s public debt continues to be the lowest in the Caribbean, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has confirmed.
ECLAC, in its 2019 Economic Survey of Latin America and the Caribbean, says that the Caribbean country with the lowest level of public debt is Guyana, with a public debt of 41.7 per cent of the country’s Gross Domestic Product (GDP).

The report, when compared to that of 2018, shows that there was a 5.2 per cent decrease in the country’s public debt. In 2018, it was reported that public debt was 46.9 per cent of the country’s GDP.

According to ECLAC, the data available for seven Caribbean countries shows that, on average, central government’s gross public debt decreased in the sub region.
At the national level, Barbados still has the highest public debt, the equivalent of some 4.7 per cent of its GDP as of March 2019, followed by Jamaica, which has a public debt of 93.8 per cent of GDP), even though the latter has reduced its debt by almost nine percentage points of GDP since the close of 2018.

The average gross public debt of the Caribbean countries was 71.8 per cent at the end of 2018, a year-on-year drop of 2.6 percentage points.
Minister of Finance, Winston Jordan said he was commended several times for Guyana’s having the lowest debt to GPD ratio in the Caribbean.
“We produce debt reports every year that show this,” said Minister Jordan in an invited comment on Sunday.
The minister said he has not seen the recent report, but will comment further on the matter, once he reviews the report later this week.
Back in 2017, Minister Jordan had said that despite the significant progress Guyana had made in managing its debt, the government will continue to work hard to ensure that debt levels remain sustainable.

He had noted, too, that under the Public Debt Management Capacity Building Programme (PDP)’s Strategic Country Plan for Guyana, the country has made notable progress in the area of debt management. That programme, he’d said, came to an end in 2018.
The finance minister singled out several areas that have experienced progress here, and among them are the formulation of a National Sustainable Funding Strategy in 2015, inclusive of a Debt Sustainability Analysis and Public Debt Strategy.

There was also a comprehensive Public Debt Management Procedures Manual, which has improved and ensured consistent debt management operations while reducing operational risk. In addition to these was a National Workshop on Debt Management, Self-Evaluation and Improvement (DMSAI) in 2016, using the World Bank Debt Management Performance Assessment (DeMPA) methodology to assess Guyana’s debt management operations. This workshop charted a course for the improvement and achievement of international best practices.

RAISE THE BAR
“These achievements are tangible indications of our Government’s redoubled efforts to ‘raise the bar’ in the management of public finances,” Minister Jordan said, adding that such efforts ensure heightened transparency and accountability, value for money and efficient and effective allocation of the country’s resources.

According to the minister, Guyana is well acquainted with the harsh consequences of an onerous debt burden, as well as the painful process of structural adjustment, and the harsh outcomes of weak and imprudent management of the public purse by previous administrations.

Going forward in 2019, ECLAC has projected that interest payments on public debt are expected to fall in Guyana and Barbados.

Interest payments on the public debt in the Caribbean sub-region are expected to be 2.8 per cent of GDP, similar to the level reached in 2018.

Public debt costs for most countries of the sub-region have remained under three per cent of GDP, which is close to the average for the sub-region in 2018

Meanwhile, the Caribbean countries are expected to take advantage of the greater space offered by higher public revenues to increase their total spending, which will rise to 29.2 per cent of GDP in 2019, up from 28.2 per cent in 2018.
In particular, capital expenditures will raise from 3.4 per cent of GDP in 2018 to 4.2 per cent in 2019.

These expenditures, which are linked to public investment, are expected to increase in eight of the 12 Caribbean countries analysed, up one percentage point of GDP or more in Antigua and Barbuda, Grenada, Guyana, and Saint Kitts and Nevis.

Public revenues are projected to continue to rise in 2019, albeit at a slower pace than was seen in 2018. This increase — up from 27.0 per cent of GDP in 2018 to 27.7 per cent in 2019— will be the result of both higher tax and non-tax revenues.

With regard to tax receipts, Guyana, Saint Vincent and the Grenadines and Trinidad and Tobago are expected to see increases of more than 1 percentage point of GDP in 2019.