Dr Ashni Singh delivered his first national budget presentation as Guyana’s Finance Minister on February 2, 2007.
“Madam Speaker, we in Guyana have much for which we should be thankful. Although the floods of early 2006 threatened to derail many of our programmes and to undermine our targets, we were nevertheless able to manage the economy effectively and return substantial real growth,” Singh said then.
The flooding Singh was referring to then was rising water levels that affected Guyana and its people.
Now 16 years later, Guyana and its people are facing the effects of a different kind of flood, with an influx of interest in their oil discoveries and the economic fortunes expected to come as a result of those finds.
In that 2007 presentation, Singh lauded the economic development of Guyana describing the real growth of 4.7 per cent the country had achieved as “a most commendable performance.”
That economic performance, however, now pales in comparison to the figures that Guyana has been achieving.
“We’ve been able to achieve world-beating real economic growth and expansion and not only in a single year. You would have heard that last year we were the fastest-growing economy in the world with over 62 per cent real growth.
“Not only last year, but in fact starting from 2020, first oil having been produced in December 2019 from 2020 onwards, we’ve achieved extremely strong real economic growth overall and the outlook remains extremely favourable so we are looking at 2023 projected economic growth of 25.1 per cent,” Singh told the International Energy Conference held in Georgetown.
“And in the medium term for the next three to four years sustained economic growth in excess of 25 per cent,” he said.
This achievement of sustained economic growth of 25 per cent is rare in any economic context.
“Over the last three years, the Guyanese economy has tripled in size. Our nominal GDP, the size of the economy, broke the one trillion dollar mark in 2019 for the first time. In 2019 we ended the year with nominal GDP of 1.078 trillion Guyana dollars, we ended 2022 with nominal GDP in excess of 3 trillion Guyana dollars so over the space of three years the size of the economy has tripled,” Singh said.
In 1991 Guyana’s public debt to GDP ratio exceeded 617 per cent, Singh said.
Now it stands at 24.6 per cent.
“You will no doubt recognise a debt to GDP ratio of 24.6 per cent in fact places Guyana ahead of almost any economy certainly in this hemisphere and puts us in a position where we actually have fairly significant headroom to borrow,” Singh said.
Singh has seen first hand the change in economic fortunes facing the country.
Speaking to Guardian Media in an exclusive interview at the balcony of the Marriott Hotel in Guyana, Singh said the goal is to ensure that Guyana never returns to the economic position it once had been in.
“I wouldn’t pretend to say that this is an easy challenge to be navigating but we are confronting it.
“That is why we value also communication with the population making sure that people understand what we are doing, making sure that people understand the direction in which we are going. Making sure that people understand how their own well-being is improving,” Singh said.
“And what they need to do to position themselves to take advantage of the remarkable and exciting story that is Guyana of the future,” Singh said.
Based on current projections Guyana’s sovereign wealth fund, the Natural Resources Fund, is expected to have a balance of US$5.4 billion by the end of 2026.
“The volume of money that is coming is still relatively modest relative to the needs of the country, so I am always very cautious about creating this impression that you are talking about vast volumes of money that are coming in. That is not the case there are still very important fiscal choices that have to be made balancing competing demands,” Singh said.
“We are in a better fiscal position now than we were 10, 15, 20, certainly 30 years ago, we are in a better fiscal position we don’t have the same tightness of fiscal constraints as many other jurisdictions do but we still have a very real fiscal constraint and we have to make sure that we manage the limited fiscal resources that we have in a prudent manner to lay the foundation for long term well-being and not to compromise long term well being,” Singh said.
Singh believes the current Dr Mohamed Irfaan Ali administration is up to the challenge.
“It is my privilege to serve the people of Guyana as their Minister of Finance at this time but I pride myself too as part of a government, led by the president, that is very well seized of the need for responsible government at this point in time perhaps more so than at any other point in time in Guyana’s history,” he said.
Singh said Guyana intends to learn from the mistakes made by others.
“The world is not short of examples of jurisdictions that have fallen into the well-known circumstances of over-dependence on a particular economic sector and so we place the highest level of importance on ensuring that we achieve strong non-oil economic growth and that we do the things necessary today to continue to have strong non-oil economic growth going forward,” Singh said.
As such he said will ensure the growth of its non-energy sectors.
Guyana’s 11.5 per cent in non-oil economic growth in 2022, Singh said.
Real economic growth in the non-oil economy is expected to be 7.9 per cent for this year.
Singh said that real economic growth in the non-oil economy in projected to be “solidly in excess of five per cent in the medium term.”
