“The performance of the public enterprises remains a cause for concern with the budgeted deficit of $10.1 billion, worsening to a latest forecast of $15.8 billion, for 2018 – a deterioration from the deficit of $13.0 billion recorded for 2017,” Finance Minister Winston Jordan said.

He made the remarks during his budget presentation on Monday in the National Assembly. Minister Jordan said these outcomes resulted mainly from lower sugar production by GuySuCo, and higher acquisition cost of fuel by Guyana Power and Light Incorporated (GPL) and Guyana Oil Company (GuyOil), in 2018. He said overall, between the budgeted and revised positions for 2018, revenue of the public enterprises declined by 2.8 per cent, to $120 billion, while the total non-interest expenditure grew by 8.2 per cent to $126 billion.

Monetary developments
Meanwhile, Jordan said the supply of money and quasi money is expected to increase by 5.3 per cent at the end of 2018. The amount of money in the economy is anticipated to grow to approximately $386.5 billion, with all monetary aggregates projected to expand, in 2018. Moreover, the level of narrow money is likely to grow by 6.7 per cent to $167.9 billion, in 2018, reflecting an expansion in demand deposits and currency in circulation, of 12.1 per cent and 8.6 per cent, respectively. “In contrast, cashiers‘ cheques and acceptances are forecasted to decline by 54.7 per cent. With regard to quasi money, this aggregate is projected to increase by 4.2 per cent to $218.6 billion, mirroring growth in its two main components: time and savings deposits, of 5.2 per cent and 4.0 per cent, respectively,” Jordan said.

He added that net domestic credit is expected to grow by 14.6 per cent to $251.2 billion, in 2018. Credit to the agriculture and services sectors is projected to grow by 12.0 per cent and 6.1 per cent, to $12.7 billion and $69.9 billion, respectively. In contrast, he said loans and advances to the mining and quarrying, and manufacturing sectors are projected to contract by 11.9 per cent and 3.7 per cent, to $4.7 billion and $23.6 billion, respectively. On the other hand, credit to households is anticipated to increase by 2.1 per cent to $31.1 billion, while real estate mortgage loans are projected to grow faster at 6.6 per cent to $83.1 billion, in 2018. Credit instruments such as credit cards are also anticipated to expand by 3.3 per cent to $3.2 billion. The public sector is expected to remain in a net credit position.

In 2018, total liquid assets of the commercial banks are projected to increase by 1.9 per cent to $114.0 billion; this is 50.8 per cent above the minimum required amount, with treasury bills accounting for 49.3 per cent of that total.
He said the 12-month inflation rate is estimated to increase to two per cent, slightly below the projected 2.4 per cent. The small savings rate stood at 1.04 per cent as of October 2018, declining seven basis points, when compared with December 2017. Similarly, the weighted average lending rate declined by six basis points to 10.1 per cent, over the same period. According to Jordan, while the small savings rate is likely to remain stable, the weighted average lending rate is expected to decline marginally, towards to end of 2018.

In addition, at the end of October 2018, the 182-day and 364-day domestic treasury bill yields decreased to 0.96 per cent and 1.14 per cent, from 1.11 per cent and 1.20 per cent, respectively, when compared with December 2017; the 91-day domestic treasury bill yield remained stable at 1.54 per cent. Domestic treasury bill yields were, on average, lower thus far, in 2018, and are expected to continue trending lower towards the end of 2018, due to more competitive bidding practices.