Guyana’s External Public and Publicity guarantee (PPG) debt grew by 3.8% from US$1,571.9 million at the end of last year, to US$1,631.1 million at end-June 2023.

The Ministry of Finance stated in its half-year report that the increase in debt is due to an increase to positive net flows from bilateral creditors such as Eximbank of China, China CAMC Engineering Co., Ltd., and United Kingdom Export Finance.

The report said “while the share of external PPG debt is less than half of the total PPG debt portfolio, in nominal terms, external PPG debt grew by 3.8 percent, from end-2022 to end-June 2023. As Government continues to borrow externally to finance its development agenda, it is anticipated that external debt would continue to grow and therefore more foreign currency would be needed to meet future debt service payments”.

Earlier this year, the Government responded to criticisms about what appear to be a borrowing spree to fund major projects here.

Former Auditor General Anand Goolsarran warned the government of its over accumulation of public debt from loans.

According to the report, at the end of June 2023, multilateral creditors held almost 68% of the country’s external debt portfolio, while bilateral creditors holding 30.3%  the other 1.9% percent was held by private creditors.

At start of this year, the country had accessed a number of loans, including three from the Inter-American Development Bank (IDB) totaling hundreds of million US dollars.  This is expected to see the country’s external debt growing by a further 31.6 at the end of this year, reaching US$2,1460M.

“In terms of exposure to foreign exchange risk, at the end of June 2023, 41.7 percent of the total PPG debt was denominated in foreign currency, a decrease of 1.4 percentage points when compared with the position at the end of 2022. Additionally, in comparison to a year ago and at the end-2022, domestic/local currency-denominated debt continued to account for the larger share of PPG debt portfolio. Notably, almost 100 percent of the domestic PPG debt is denominated in domestic/local currency, while 100 percent of the external PPG debt is denominated in foreign currency,” TheMinistry of Finance stated.

While noting the increase, the Finance Ministry indicated that the share of variable interest rate debt in total public debt shrank by 2.8 percentage points, to 34.6 percent at end-June 2023. This reflects new issuances of fixed-rate instruments in the first half of 2023, coupled with a marginal decline in variable-rate debt.

The reduced share of variable-rate debt, the Finance Ministry says, implies lower exposure to interest rate risk. However, as at end June 2023, the fixed rate debt accounted for 65.4 percent of the public debt of which about half is refixed in one year or less.

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