Feb 24, 2021 News
Kaieteur News – Vice President, Dr. Bharrat Jagdeo, revealed that a portion of the $383.1B budget for 2021 will be financed through loans. Dr. Jagdeo had shared these and other details during his press engagement earlier this month.
When the VP was asked at that press engagement what portion of the budget would be funded by loans, he explained that, “Yes, like always, almost every year. I keep saying to people that we still run a fiscal deficit over the years. We have had to borrow $90-something billion dollars. And the deficit skyrocketed in the APNU+AFC era, but they just spent a ton of money on the recurrent expenditure without very little to show for it.”
With aims of managing the debt and spending, the VP explained that the People’s Progressive Party/Civic (PPP/C) government is looking to establish a “cap,” and is currently looking at examining reoccurring expenditure.
“That is why we are examining the places we are renting,” the VP said, “how much we are spending on vehicle maintenance; how much we’re spending on food in government because those items skyrocketed under APNU+AFC.”
This story comes on the heels of the Senior Minister, Dr. Ashni Singh, revealing that no new taxes funded the $383.1B budget. However, Dr. Singh failed to state how much of the budget was actually financed loans.
This article also comes on the heels of the government announcing that it will raise the overall debt ceilings so that it could borrow more money.
In the announcement, the government had proposed that the domestic debt ceiling be increased to $500 billion, almost three decades after the last upward revision to $150 billion in 1994. Additionally, a new external borrowing ceiling of $650 billion was proposed, three decades after its last increase to $400 billion. Both of these increases reflect a 233.3% and 65% increase, respectively.
According to a Ministry of Finance statement, the move to increase the domestic debt ceiling was influenced by several factors, one of which it says, is the existence of a large Consolidated Fund overdraft at the Bank of Guyana, accumulated over the last five years.
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