External debt “well below” international threshold requirement – Min. Jordan
DPI, Guyana, Monday, June 25, 2018
Minister of Finance, Winston Jordan today clarified that Guyana’s external debt currently stands below 50 percent of its Gross Domestic Product (GDP) with the international threshold requirement set at 60 percent of GDP.
He clarified further that external debt should be viewed in relative terms and not absolute, noting that as the economy continues to grow it can take on more debt.
Minister of Finance, Winston Jordan.
Speaking to the media prior to the sitting of the National Assembly, the Finance Minister dismissed and quashed claims that government has borrowed some $50Billion from the Central Bank.
Minister Jordan said for years, under the previous government, the Consolidated Fund was in overdraft. “The last government had to abandon the first Consolidated Fund, which is still in overdraft, created a new Consolidated Fund and all that went into overdraft.”
He further explained that the Coalition Administration inherited a Consolidated Fund that was in overdraft which resulted from the Gold Board’s operation, which was significantly dependent on the Fund.
In addition, the World Bank Group recently approved a US$35Million Development Policy Credit to support Guyana’s efforts to strengthen the financial sector development and fiscal management to better prepare the country to benefit from the newly discovered oil and gas reserves.
Minister Jordan said the loan comes with good concessionary terms which include a 40-year payment back period and one percent interest rate. The minister said the funds will be used almost immediately.
It will also assist Guyana in transforming its oil wealth into human capital.