Analysis and News

Guyana’s Public and Publicly Guaranteed Debt Stock grew 12.2% for first half of 2021

BY GEOCAP's Contributor: Richard Bhainie

The Co-operative Republic of Guyana total stock of public and publicly guaranteed debt, which comprises both external and domestic debt, increased by 12.2 percent when compared to the end-2020 figure of 2,592.2 million USD.


Guyana’s Ministry of Finance in their Mid-Year Report 2021 publication disclosed that at the end of June 2021, Guyana's total stock of public and publicly guaranteed (PPG) debt amounted to 2,907.8 million USD, with total public debt accounting for 2,905.4 million USD, and total publicly guaranteed debt for the remaining 2.4 million USD.


External PPG debt grew by 2.6 percent, from 1,320.8 million USD at the end of 2020, to 1,355.3 million USD at end-June 2021 - an increase which was largely due to positive net flows (disbursements less principal repayments) from the Inter-American Development Bank (IDB), driven by disbursements under two loans geared at combating the COVID-19 pandemic.


It was reported that in the first half of 2021, disbursements from external creditors amounted to 61.6 million USD, more than three times that in the first half of 2020.


“This increase reflects higher disbursements from multilateral creditors, moving from 10.3 million USD in the first half of 2020, to 60.8 million USD in the first half of this year. Disbursements from the IDB increased ten-fold, from 5.2 million USD in the first half of 2020, to about 55.5 million USD for the corresponding period in 2021,” the report noted.


“About 75.2 percent of the latter amount was allocated to combatting the economic and social ramifications of the pandemic. Meanwhile, as key projects approached completion, bilateral disbursements totalled 0.8 million USD in the first half of the year, 89.1 percent lower than 7.3 million USD during the same period of 2020,” it added.


The Ministry reported that at end-June 2021, multilateral creditors held 64.2 percent of external PPG debt, bilateral creditors 33.4 percent, and private creditors 2.4 percent. 


The Ministry predicts that the external PPG debt stock is projected to increase by 3.9 percent from its mid-year position, to 1,407.5 million USD at the end of 2021, mainly driven by disbursements under several IDB funded projects.


In terms of domestic PPG debt, at the end of June 2021 domestic PPG debt amounted to 1,552.6 million USD, a 22.1 percent increase from the end-2020 figure of 1,271.4 million USD.


In June 2021, the government securitised the inherited overdraft at the BOG using 85 variable-rate debentures, with tenors ranging from 1 to 20 years, totaling 200 billion GYD (about 959.2 million USD). Consequently, the first half of 2021 ended with the Consolidated Fund, as well as public deposits, reflecting a positive balance.


“These moves were intended to bolster transparency and accountability in public debt management, and to restore the integrity of Guyana’s fiscal accounts. The growth in domestic PPG debt was also influenced by a 29.6 percent expansion in the stock of treasury bills (T-bills), from 388.2 million USD at end 2020, to 503.2 million USD at end-June 2021,” the report stated.


“This was largely driven by increased issuance of fiscal T-bills. The domestic PPG debt stock is projected to grow by 19.1 percent from its mid-year 2021 position, to 1,849.3 million USD at end-December 2021, due to anticipated new T-bill issuances in the second half of 2021,” it added.


Since assuming office in August 2020, the new People’s Progressive Party Civic (PPP/C) Government of Guyana has already crafted a new Public Debt Policy for the period 2021 - 2024 intended to aid the country in the determination, establishment and upholding of the legal and institutional frameworks which govern sovereign borrowing and provides a broad framework to help consolidate the long-term sustainability of Guyana's debt.


After the new Government resumed office, the Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, identified that it is necessary to contract new financing, in order to provide essential relief and services to the populace, invest in growth-promoting infrastructure, and stimulate an overall resurgence of the non-oil economy, as he stated in the Ministry’s Public Debt Report 2020.


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