By Mark DaCosta- The People’s Progressive Party (PPP) regime recently unveiled its ambitious 2024 budget, boasting a staggering $1.146 trillion allocation. However, rather than ushering in prosperity for all, this budget seems poised to make life even harder for Guyanese. Particularly those already struggling. The injection of such a colossal sum of money into the economy may spell trouble, leading to rampant inflation and dire consequences for the average person.
Critique by Member of Parliament Amanza Walton-Desir echoed the sentiments of many Guyanese, emphasising the perceived disparity between grand promises and tangible actions benefiting the people. The allocation of funds towards large-scale infrastructure projects, while essential, raises questions about the government’s commitment to promptly alleviating the immediate and substantial burdens being faced by ordinary citizens.
Without leaning heavily on Walton-Desir’s specific remarks, it is evident that the concerns extend beyond political affiliations. The budgetary decisions, such as emphasising the GOAL online program over investing in the University of Guyana, prompt reflections on the government’s approach to educational development and its direct impact on the working class Guyanese.
The Alliance For Change had proposed inclusion of the following:-
- Free Education from Nursery to University, as is constitutionally stipulated
- Increase in the income tax threshold to $150, 000
- Increase in the minimum wage by 50%, and associated adjustment along the public and private sector.
- Reduction in vat
- Increase in old age pension $70, 000
- An increase in budgeted allocation to GECOM to cater for a more superior system that includes but not limited to biometrics.
- Remove the cost of residential house lots
- Significantly investment in national security
- Equitable adjustment and increase in cost of living allowance
- Investment in provision of Public Transportation
- Reduction in the interest rate for homeowners
- Increase subvention to NDC and Town Council that will not be subjected to central government directive
- Monetary provisions for first time home builders.
Likewise Leader of the Opposition Aubrey Norton, prior to the Budget, said the parliamentary coalition, APNU+AFC would expect:-
- That a cost of living allowance will be given to all workers,
- That they will raise the Income Tax Threshold to $150,00
- That there will be a reduction in VAT
- That there will be a removal of VAT from all locally manufactured food items,
- That there will be rationalization of electricity and water rates;
- That there will be an increase in the minimum wage by at least 50%
- That they will remove personal income tax for low-wage earners
- That they will provide a generous risk allowance for frontline workers, and
- That they will guarantee all households a minimum livable income.
Guyanese need to pay attention to the following facts. Dumping over a trillion dollars into circulation might seem like a good thing, but the underlying economic dynamics paint a far different picture. The fear is that this massive injection of funds could fuel more inflation, resulting in a devaluation of the Guyanese currency. As a consequence, prices across the board are certain to skyrocket, exacerbating the financial woes of an already burdened populace.
Inflation, in simple terms, is the persistent increase in the general price level of goods and services in an economy over time. It erodes the purchasing power of a currency, leading to a decrease in the real value of money.
Interestingly, when the political opposition proposed direct cash relief to help Guyanese citizens, the PPP regime flatly rejected the idea citing concerns about inflation. Now, ironically, with the unveiling of the 2024 budget, it appears that the relief promised is insultingly small, disproportionately favoring the elite and wealthy, while leaving the majority of Guyanese to grapple with the consequences of potential inflation.
The infusion of such a substantial sum into the economy sets the stage for a domino effect of inflationary pressures. As more money circulates, demand for goods and services rises, outstripping the available supply. This excess demand will prompt businesses to increase prices, contributing to the overall further rise in the cost of living for Guyanese.
The brunt of inflation is most acutely felt by those at the bottom of the economic ladder. Basic necessities such as food, building materials, and rent are expected to witness significant price hikes. As the cost of living soars, the already strained budgets of ordinary citizens will be stretched even thinner.
Leading economic experts have expressed apprehension about the potential fallout from such a massive budget. An economist affiliated with the Guyanese Economic Watch, warns, “The injection of such a colossal amount into the economy without corresponding increases in production can be a recipe for disaster. Inflation is inevitable, and the consequences will be dire for the average Guyanese.”
Echoing these concerns, another Guyanese analyst told this publication that, “The budget seems to prioritse infrastructure and elite interests, neglecting the immediate needs of the people. Inflation, coupled with a lack of direct relief, could plunge many Guyanese into deeper financial distress.
The glaring absence of substantial relief for Guyanese, and the potential inflationary fallout from Budget 2024, raises questions about the PPP regime’s commitment to the welfare of citizens, especially the poor. One must ponder if a caring government would knowingly implement policies that could lead to increased hardship for the very people it is meant to serve. And the PPP must certainly have known all of this.
As Guyanese grapple with the implications of the 2024 budget, awareness becomes crucial. Understanding the potential consequences of inflation and questioning the priorities reflected in the budget is a collective responsibility of all Guyanese.
In the coming week the Budget will be debated by parliamentarians on both sides of the House. Citizens expect careful scrutiny, particularly from the Opposition in the discourse surrounding Guyana’s economic well-being
