Government’s employment costs rose to $59.5 billion last year, an increase of $100M.
According to the amended end-of-year figures by the Ministry of Finance released last week,
the increase was driven by increased wages and salaries granted in 2018.
The amendments in the ‘End of Year Outcome 2019’ report was necessary, as the Ministry of Finance had used estimations to present the 2019 National Budget in November.
The report had also revised the growth performance of the economy 4.1 percent, the highest since 2013.
“Notwithstanding the positive performance, growth is still heavily influenced by individual sector performances. Belated improvements in gold declarations during the last quarter of 2018 was a key driver in realising this growth rate,” the outcome report said.
Economic resilience going forward will be largely dependent on the country’s ability to capitalize on institutional strengthening and opportunities for diversification.
However, the ministry acknowledged that difficulties in spending budgeted sums in time, continues to be a challenge in implementing the Public Sector Investment Programme.
“More rigorous steps are being applied to project appraisals to ensure a higher degree of project implementation readiness during 2019 and the years ahead. Revenue collections remained high but include a significant level of arrears as improved compliance and the 9-month tax amnesty bolstered revenue collections.”
International downside risks exist and threaten to destabilise commodity prices, the report advised.
“As such, given our economy’s dependence on primary commodities, this continues to be a major challenge in achieving economic resilience. Government remains firmly committed to ensuring that the economy remains rooted in sound macroeconomic and fiscal policies including being anchored by a low to moderate risk of debt distress. The task before us is to ensure more effective implementation of the annual budget, and to achieve greater accountability using national performance indicators across all sectors, as we strive to deliver improved services across the whole of Government.”
In December 2018, the 12-month inflation rate was 1.6 percent, instead of the 2.0 percent reported in Budget 2019.
According to the Finance Ministry, this was due to all major components of the Consumer Price Index (CPI) returning lower levels than previously estimated.
“As projected in Budget 2019, the small savings rate remained stable at 1.04 percent, and the weighted average lending rate declined consistently, ending the year at 10.03 percent.”
With regards to the official exchange rate of the Guyana dollar to the US dollar, the ministry said that this was stable at $208.5 throughout the remainder of 2018.
On the other hand, the market mid-rate of the Guyana dollar to the US dollar mostly depreciated, ending 2018 at $213.2, $0.4 weaker than in October 2018. In contrast, after October 2018, the Guyana dollar weakened before strengthening against the British pound, finishing the year at $271.7.
The central government recorded a fiscal deficit (after grants) of $27.3 billion in
2018, or 3.4 percent of GDP, smaller than the projected deficit of $31.2 billion, or 3.9 percent of GDP, projected in the 2019 Budget. The smaller-than-anticipated deficit was due to lower capital and current expenditures.
With regards to tax and non-tax revenue collections in 2018, this was $216.7 billion, 0.1 percent below the projection in Budget 2019.
In fact, the report said, tax revenue, which represented 91.6 percent of central government revenue, fell to $198.5 billion, in 2018, a decline of $1.0 billion or 0.5 percent below the revised projection in Budget 2019.
In 2018, the Guyana Revenue Authority (GRA) remitted $117.5 billion, 59.2 percent of tax revenue collections, reflecting higher remissions for companies and businesses.
Non-tax revenue increased by $0.8 billion, 4.8 percent above the $17.4 billion projected in Budget 2019.
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