Latest update February 12th, 2025 8:40 AM
Jan 18, 2025 News
…projects 9.5% growth in oil sector, 10.6% in economy
By: Davina Bagot
Kaieteur News- Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh on Friday presented a $1.382 trillion budget for 2025 in the National Assembly, a 20.6% increase compared to Budget 2024.
This year’s fiscal plan was presented under the theme ‘A secure, prosperous and sustainable Guyana’.
During his uninterrupted five hour-long presentation in the dome of the Arthur Chung Conference Centre, the Minister explained that Central Government’s overall spending is projected to increase by 16 percent in 2025.
According to Dr. Singh, “This is on account of an accelerated implementation of critical investment projects and programmes including the New Demerara River Crossing, six regional hospitals, and progressing works on major highways including New Amsterdam and [the] continuation of Heroes Highway to Busby Dam just to name a few.”
This means capital expenditure is projected to increase by $91.6 billion while non-interest current spending will increase this year by $87.2 billion when compared to the 2024 level.
The finance minister also provided a detailed overview of the performance of the economy in 2024.
Notably, the country’s Gross Domestic Product (GDP) again recorded double-digit growth last year for a fifth consecutive year, since 2020. The country’s GDP recorded 43.6% growth in 2024, with the non-oil economy also recording growth of 13.1%. This growth was reflective of strong oil output as well as growth in the rice, other crops, and bauxite production, along with expansion in other mining and quarrying as well as in the construction and services sectors.
Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh
Meanwhile, GDP is projected to grow by 10.6% this year, with growth in the non-oil sector projected at 13.8% for 2025.
With respect to the performance of the oil sector in 2024, Dr. Singh noted that 225 million barrels of oil was produced from the three Floating Production Storage and Offloading vessels (FPSOs) currently in operation. Notably, Guyana received 28 million barrels of the total oil produced. To this end, deposits in the Natural Resource Fund (NRF) increased from US$1.6 billion in 2023 to US$2.6 billion in 2024.
He said, “…the oil and gas sector expanded by 57.7 percent in 2024. Growth in the sector was driven primarily by the ramp up in production on the Prosperity – Guyana’s third FPSO – which started producing oil in November 2023.”
It would be recalled that just under US$1.6B was approved in the House for spending on national development priorities in 2024.
By the end of 2024, the NRF had a closing balance of US$3.1B. Shifting his attention to projections for 2025, Minister Singh said it is anticipated that there will be 246 lifts of profit oil from the Stabroek Block. Of this, Government is projected to have 31 lifts of profit oil from the three FPSOs producing currently, along with the One Guyana FPSO which is expected to be commissioned in the second half of the year. Each lift is equivalent to one million barrels of oil.
With the average price of Brent crude expected to decline to an average of US$71.9 per barrel, Government’s petroleum revenue deposits are projected to be 2.6% lower than in 2024.
To this end, Government is projected to earn an estimated US$2.2 billion in profit oil and US$340.6 million in royalties.
In keeping with the 2024 petroleum deposits, an estimated US$2.5 billion can be withdrawn from the NRF and transferred to the Consolidated Fund to support national development priorities in this year’s Budget.
Measures
To ease the cost of living, government has committed to reducing the cost of electricity by 50% this year, upon completion of the Gas-to-Energy (GTE) project.
Additionally, Dr. Singh explained, “As part of our Government’s commitment to reducing the cost of living and improving connectivity for all Guyanese, I wish to reaffirm that, upon completion of the new Demerara River Bridge, slated for the second half of the year, bridge tolls will be abolished for all types of vehicles.”
This policy will apply not only to commuters at the Demerara River Bridge, but also to commuters utilising the Berbice River Bridge and the Wismar Bridge. The removal of these tolls will result in savings to the benefit of over 50,000 daily commuters, amounting to an estimated $3.5 billion annually.
Additionally, the finance minister noted that Government will maintain a zero percent excise tax on petroleum products to shield the Guyanese from the full impact of high fuel costs.
Government will also continue its part-time job programme, introduced in 2022. Since its inception, this initiative has injected over $600 million monthly in additional household income into these communities. Building on this success, this programme will continue into 2025 with a further allocation of $11 billion.
(Gov’t unveils $1.382 trillion Budget for 2025)
Feb 12, 2025
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