Current account deficit to reach US$154M in 2003
Stabroek News
March 29, 2003
The government's current account deficit is expected to increase by 44% from US$106M last year to US$154M in 2003.
This, Finance Minister Saisnarine Kowlessar says, is because of the substantial increase in the price of fuel and the expansion of imports for the public sector as well as because of the larger Public Sector Investment Program-me (PSIP) costing $24B.
Merchandise imports are budgeted to rise by 14.2% to US$643M. Growth in fuel and lubricants is projected at 7.9% to reach US$135.7M while other imports are expected to rise by 16% to react US$507M.
Merchandise exports, Kowlessar says, are projected to increase by 4.1% to US$515M while earnings from sugar is also expected to grow by 13% to reach US$135M. Other exports are budgeted to rise by 15% to reach US$137M. Bauxite and rice are expected to earn US$39M and US$47M, slightly better performances than last year.
Gold receipts and timber receipts are expected to decline by 6.1% and 27% to US$128M and US$26M.
The overall balance of payment deficit will deteriorate further to US$64M from US$25.1M last year, to be financed by debt relief and reserves of the Central Bank.
Net services are projected to improve to US$71M if Guyana meets completion point under the enhanced debt relief framework. However, net factor services are projected to double. Private transfers are expected to grow to US$44.7M. The capital account is expected to improve by US$1.6M reflecting higher disbursements for public sector projects and increased private sector investment.
The current account deficit of the government in 2002 was an improvement of 36.2% over 2001. The overall deficit after grants was $8B or 5.7% of GDP, better than the 8.4% the previous year. That deficit was financed by net external borrowings of $3.8B and a draw down of government deposits with the banking system of $4.2B.
Last year, the government's $20B public sector investment programme had to be revised downward because the country did not meet completion point under the enhanced debt relief framework as had been expected.
