(CMC) — Guyana’s Finance Minister Winston Jordan has sought to assure the country that the economy remains sound and that external debt levels are still below 50 per cent of the country’s Gross Domestic Product (GDP) – a key indicator of a country’s financial health.
Debt to GDP for an economy is similar to a household’s combined debt – from credit cards, mortgages or small loans – as it compares to its income.
In the case of Guyana, the most recent figures indicate a debt level of 45.2 per cent in 2017 and 46.4 per cent in 2016.
“This is down from 48.6 per cent in 2015. How does this compare to the region? Sadly, some of our fellow CARICCOM countries are not in good financial shape. Barbados had a debt to GDP ratio of 145 per cent in 2016, Jamaica 120 per cent, Antigua 93 per cent and Grenada 89 per cent These debt levels are dangerously high and in the case of Barbados have meant severe austerity measures by the government and a move to the International Monetary Fund (IMF) for assistance,” the Finance Minister said.
He noted that for Guyana, the current level is more than manageable, adding that debt should be viewed in relative terms and not absolute.
“So just as a household’s income may rise, Guyana’s GDP will rise too –this year by 3.6 per cent . And with First Oil only months away, the IMF forecasts Guyana’s GDP to increase by 38.5 percent in 2021 with a significant increase in official reserves and a gradual decline of the public debt-to-GDP ratio,” Jordan said.