Leader of the Opposition, Joseph Harmon said Guyana recorded a real Gross Domestic Product (GDP) growth of 43.5% in 2020, and has within its Natural Resources Fund US$206M, despite allegations by the ruling People’s Party/Civic (PPP/C) Government that the A Partnership for National Unity + Alliance For Change (APNU+AFC) Government had poorly managed the country’s economy and in the process left the treasury empty.
Last December, Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh told the National Assembly that the Consolidated Fund was empty when the Irfaan Ali Government took office on August 2, 2020.
“No monies were remaining in the Consolidated Fund as of that date. In fact, Mr Speaker, the Consolidated Fund account was in overdraft in the amount of $78.7 billion. And I might add, Sir, that that amount would not have reflected, as of that date, cheques that were issued but had not yet been cleared, and therefore would not yet be reflected in the bank balance,” Minister Singh told the House.
But Harmon, during his weekly press conference on Tuesday, said Budget 2021, which was presented by Dr. Singh last Friday, paints a totally different picture.
“So instead of the empty treasury the PPP fed this nation in their first 6 months, this is what is emerging in the budget: Real GDP growth of 43.5% in 2020; US$206 million from Natural Resource Fund in the bank (remember PPP says we spent it all out); a solid tax base which increased the number of persons contributing to the GRA Revenue; an amnesty which we provided to tax delinquents in which brought in significant amounts by voluntary compliance; an NRF law which was heralded by the World Bank has laid the groundwork for withdrawals from the fund for purposes which have to be cleared by the National Assembly; an improved Agriculture, Forestry and Fishery sector which Dr. Singh comments grew by 4.1%; and a buoyant Public Service with a clear plan for the future and being the engine of Government’s work in a modern economy,” Harmon told reporters.
He said the PPP/C inherited a proud Guyana that the World had taken notice of in the five short years of the APNU+AFC Administration.
However, while the country’s real GDP in 2020 is estimated to have grown by 43.5%, the non-oil economy is estimated to have contracted by 7.3%.
Importantly, the overall balance of payments recorded a surplus of US$60.6M in 2020, compared to a deficit of US$48.9M recorded in 2019.
“The current account recorded a deficit of US$651.7M in 2020, 76.9 percent lower than the deficit of US$2,823.7M in 2019. The difference between the actual outturn for 2020 and the forecast resulted from a larger-than-projected merchandise trade surplus. The merchandise trade account moved to a surplus of US$514.8M, from a deficit of US$2,473M in 2019, reflecting the entry of oil exports into the balance of payments. This offset the lower-than-anticipated unrequited transfers and a higher-than-projected deficit on the net services account,” Dr. Singh detailed, during his budget presentation.
It was noted that the balance of payments surplus resulted in the Bank of Guyana increasing its external reserve position to US$680.6 million, equivalent to 2 months of import cover at end-2020.
