…foreign reserves rose to US$628M, Guyanese currency appreciated 0.97% against US dollar
Unveiling the $142.8B, 2010 National Budget yesterday before the National Assembly, Minister of Finance Dr. Ashni Singh revealed that Guyana recorded a significant balance of payments (BoP) surplus of US$234.4M in 2009, as compared to a US$5.6M surplus in 2008, and an increase in foreign currency reserves at the Bank of Guyana to US$628M. Also, the Guyanese currency appreciated by 0.97% against the US dollar. This BoP surplus was achieved through a current account deficit of US$219.7M being offset by a capital account surplus of US$454M.
Current account

The current account was reduced by 31.6% largely due to a significant contraction in the total value of imports. Merchandise imports declined by 11.7% to US$1,169.2M, which was driven primarily by a 32.5% decrease in the value of imported fuel and lubricants on account of the fall in world market prices for these commodities. In addition, other imports declined by 1.8%, with non-fuel intermediate goods declining by 10.3%, while consumption and capital goods increased by 2.9% and 1.7% respectively.
On the other hand, while export revenue also declined, it did so at a slower rate than imports, falling by 4.2% to US$768.2M.
The volume of sugar exported increased by 3.4% to 212,131 tonnes. However, its export receipts recorded a 10.2% decline to US$119.8M. This resulted from a 13.1% decline in the average export price of sugar which was primarily because of the recent third and final step in the European Union price cut which came into effect on October 1, 2009.
Rice export volumes also increased, by 32.9% to 260,815 tonnes but the average export price declined by 27.3%. Consequently, rice export receipts declined by 3.3% to US$114.1M. Export earnings from bauxite were also affected by external market conditions somewhat more drastically, and contracted by 39.3% to US$79.5M.
In contrast, export earnings from gold benefited from an 11.2% increase in average export prices, which induced higher production levels, and drove export volumes up by 24.4% to 311,884 ounces, and generated a 38.3% increase in export receipts to US$281.7M.
Export revenues were complemented by net current transfers of US$299.6M, a contraction of 8.9% from 2008, with receipts from worker remittances declining by 4.3% to US$262.1M, in line with regional trends.
Capital account
The capital account ended the year with a surplus of US$454M, aided by an allocation of US$108.6M of Special Drawing Rights by the International Monetary Fund (IMF), and on the strength of a 13% increase in net private investment to US$208M which was driven by a net repatriation of portfolio investments.
As a result of this overall balance of payments surplus, the Bank of Guyana increased its external reserves position from US$356M at the end of 2008 to US$628M, the highest level ever in the country’s history.
Also, the value of the Guyana dollar appreciated by 0.97% against the US dollar during the year. This occurred on a marginal decrease in the value of transactions conducted on the foreign exchange market. Overall volumes fell by 2.8% to reach US$4.7B, consistent with the significant reduction in the value of external current account transactions in the BoP.
These excellent developments during 2009, in one of the most difficult years for the world economy, bode well for the Guyanese economy in 2010 and beyond.(GINA)