In engagements with the Guyanese public and in reviewing media responses to the 2026 budget, overall, there has been a positive reaction to the largest record budget. Each segment or section of the public views the budget differently based on their interests and not necessarily the country’s. Almost everyone is concerned about how they benefit rather than how the country will develop. The reduction in taxes, particularly on vehicles, pleases everyone; no opposition to that.
The lower class paid attention to and is more focused on how much direct benefits (cash grants, pension and school children increase, and other handouts). The business community has been closely reviewing what this year’s monetary figures and promises really means for growth and for their businesses. They are primarily concerned about whether their revenues and profits will grow from record high allocations in all of the sectors and the contracts they can potentially get; few businesses are genuinely concerned about the country and the population. The opposition, as is their job, finds faults with the budget, regarding its viability, the high debt, and reliance on government’s optimistic revenue generation (from oil and mining and other sectors); the opposition warn of potential economic disaster even when there is probably none. Proponents of the budget highlight the benefits to the public and the economy in general. Sycophants, who know nothing about a budget (what it means and how it is drafted) or economics or finance, praise the budget regardless of how they are affected. Critics and or detractors have hardly anything positive to say about the budget with their sharp criticisms even if they know it is an outstanding budget; they are not even handed as an analyst or economist like me. Nonpartisan analysts, impartial, unbiased economists, and real professionals give serious, objective analysis – positives and negatives. Some who sing praises for their supper (and attack even-handed analysts like myself, for example) are not to be taken seriously as they hardly know anything about a budget; the public knows the usual suspects. Some write a set of nonsense that would receive a failing grade from a respectable professors.
Government people, as is expected, have defended the budget as an excellent plan for growth. They say it is people centered. It puts people first, focusing on economic well-being of the country rather than any one particular segment of the population. No doubt, the budget seeks to keep GDP growth and inflation stable. It also reflects the resilience of the economy and its capacity for sustained rapid growth.
A large chunk of the budget is deficit financed; US$2.6 billion (over half a trillion GYD). Budgets of almost every country are heavily deficit funded. The Vice President (Jagdeo), the President, and the Finance Minister would have paid careful attention to the deficit and borrowing; Jagdeo is smart when it comes to borrowing to grow the economy, generating revenues and creating jobs. Guyana’s debt is sustainable now because of the long-term projected revenues from oil and mining sectors. But government has to be careful because debt is now US$10.3.billion. Interest payments are climbing rapidly; we have to take cognizance of what happened prior to 1992 and curtail borrowing. We have to pursue strategic measures on borrowing. We should borrow less and use our own financing from the heritage fund or some other means. Instead of foreign (high interest) borrowing, borrow from local sources and encourage foreign currency accounts from the diaspora in our local banks from which we can borrow. Or the diaspora can loan directly to the government through accounts in banks as used by India some 25 years ago. We should also look at means to increase foreign currency generation.
The general consensus is it is a growth and people centered budget. The business community has expressed optimism. The poor are happy for increased handouts. The deficit is problematic as expressed by objective economists and concerned businesspeople. The advice is that Government has to keep tab of global energy fluctuations and lingering vulnerabilities of the lower class or poor that is half of the population. We must grow the non-oil revenue sector. We must bolster the non energy sectors to further diversify the economy. We must encourage more people from the lower and working class to get into small business. Businesses should pursue asset divestments aimed at generating greater revenues and export more to bring in foreign currency. We have to grow more food to cut the food import bill that is soaking up our foreign currency.
The many initiatives announced by the Finance Minister are expected to add to the buoyancy of the economy and yield significant economic benefits. They will continue to create employment opportunities and contribute to a more resilient, stable, and diversified economy. Growth will continue perhaps beyond what government projects.
Yours truly,
Dr Vishnu Bisram