-Dr. Jagdeo says as nation maintains one of the lowest debt-to-GDP ratios in the world

GUYANA may soon reach a point where it no longer needs to borrow as People’s Progressive Party (PPP) General Secretary and Guyana’s Vice-President Dr. Bharrat Jagdeo said on Thursday that the nation is being backed by prudent fiscal planning and a comprehensive five-year development framework.

At the time, Dr. Jagdeo was speaking at a press conference at Freedom House, Robb Street where he explained that Guyana’s development strategy and its expanding oil and non-oil economies have placed the country in a strong fiscal position.

While there is ongoing borrowing, which is being used to support national development, the Vice-President said that currently in the Natural Resources Fund (NRF), Guyana has more revenue than its total external foreign debt.

He said: “One of the few countries that has that and now our external debt would fall to about 12 per cent of GDP, one of the lowest in the world,” highlighting that while major economies are struggling under heavy debt burdens, Guyana is moving in the opposite direction.

He added: “And then towards the latter part, once the debt is already, the capital spending is amortised on the oil and gas sector, then the revenue starts going up higher towards the outer years, then you can easily retire, maybe we don’t even need to borrow at that time.”

Further, he defended the government’s policy direction to support long-term planning for prosperity rather than short-term gains.

For instance, over the next five years, the government plans to invest over $800 billion in the housing sector, a move expected to benefit the lives of thousands of Guyanese, while simultaneously supporting broader economic growth.

“You don’t manage for cash grant alone…. Cash grant should help supplement what you have” he said, noting that the government is also planning so that there are higher wages and salaries, increased pension, improved public assistance.

Earlier this year, the United Nations Economic Commission for Latin America and the Caribbean’s (ECLAC)’s “Fiscal Panorama of Latin America and the Caribbean 2025” report disclosed that Guyana continues to boast the lowest public debt level in the region.

The report highlighted that Guyana’s public debt ratio has been decreasing since 2022 owing to high Gross Domestic Product (GDP) growth rates, which were higher than 40 per cent in real terms in 2024, driven by the expansion of offshore oil production.

Guyana has been transformed from a country that was once swallowed in debt to a nation with a public debt that continues to display a downward trend, and this was even highlighted in United Nations ECLAC’s “Fiscal Panorama of Latin America and the Caribbean 2024” report.

Further, the United Nations ECLAC’s “Fiscal Panorama of Latin America and the Caribbean 2023” report had also said that Guyana’s debt-to- GDP ratio fell by an impressive 16 percentage points between 2021 and 2022, as a result of a 62.3 per cent increase in economic output in real terms, due to the commencement of offshore oil-and-gas production.

Under the leadership of the People’s Progressive Party/Civic (PPP/C), there have been active steps to make strategic investments and manage the nation’s finances responsibly.

The total Public and Publicly Guaranteed (PPG) debt-to-GDP ratio has reduced from 47.4 per cent at the end of 2020 to 24.3 per cent at the end of 2024.

This was according to Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh previously.

Dr. Singh noted that Guyana’s total public and publicly guaranteed (PPG) debt amounted to US$5.993 billion at the end of 2024, mainly on account of net inflows from external and domestic creditors.

Under the People’s National Congress (PNC), Guyana was marred by a significant debt service burden, when the country’s debt was once nine times the size of the economy and the country was using over 100 per cent of revenue to service debt.

However, Guyana has since gained better footing and is no longer facing a crippling debt servicing crisis.

As Minister Singh put it, the current figures provide a clear indication of a marked improvement in Guyana’s capacity to maintain public debt into the future, without the need for fiscal adjustments.

While noting that external PPG debt at the end of 2024 was US$2.239 billion, the minister said that net inflows from external creditors in 2024 were mainly associated with major infrastructural works, healthcare projects, as well as social protection programmes and the procurement of aircraft for military use.