Highlights of Guyana’s Public Debt for the Second Quarter Ended June 30, 2019:
- Guyana continues to manage its public debt in a prudent and sustainable manner, maintaining a moderate exposure to risk of debt distress
- At the end of June 2019, the total stock of public debt was US$1,657.80 million, a 1.5 percent increase compared to the end-June 2018 position of US$1,633.97 million. This increase was mainly attributable to higher net flows, which were driven by substantially higher disbursements relative to principal repayments between June 2018 and June 2019. However, the total stock of public debt decreased by less than 1 percent from the end of first quarter 2019 position of US$1,660.16 million.
- External debt stock accounted for US$1,274.04 million or 76.9 percent of the total stock of public debt at end-June 2019, while domestic debt was about US$383.74 million or 23.1 percent.
- As at end-June 2019, the three (3) largest creditors in the external debt portfolio, ranked in order of share, were: Inter-American Development Bank (IDB) – 41.1 percent; Exim Bank of China – 17.8 percent; and Caribbean Development Bank (CDB) – 11.9 percent.
- Total public debt service payments for the second quarter of 2019 amounted US$23.74 million, bringing the total debt service payments for the first half of 2019 to US$51.98 million. This represents a 17.3 percent increase from US$44.31 million for the first half of 2018.
- Total external debt service for second quarter of 2019 was US$17.27 million, leading to an accumulated US$42.23 million in external debt service payments for the first half of 2019, or 81.2 percent of total debt service. Domestic debt service payments amounted to US$6.48 million in the second quarter of 2019, and US$9.75 million or 18.8 percent of total debt service payments in the first half of 2019.
- In May 2019, Guyana fully repaid its debt to Trinidad and Tobago, in keeping with the Paris Club Bilateral Rescheduling Agreement signed on October 6, 2005. Trinidad and Tobago, which was Guyana’s largest bilateral creditor about two decades ago, generously wrote off US$482.5 million or 90 percent of Guyana’s debt as part of the Paris Club arrangements.
- For the first half of 2019, 7.6 percent of total government revenues went towards external debt payments, whereas 1.75 percent went towards domestic debt service payments, resulting in a total of 9.35 percent of revenues being utilised for debt service payments.
- Guyana made its first principal repayment to Kuwait for an amount of US$2 million in May 2019, in keeping with the terms of the Bilateral Debt Settlement Agreement signed in March 2019.
- Throughout the second quarter of 2019, Guyana continued to actively engage in debt relief negotiations with the remaining bilateral non-Paris Club creditors in arrears. Argentina, Libya, the United Arab Emirates (UAE) and Serbia have all been provided with proposals outlining various options to settle Guyana’s debt in a mutually acceptable manner.
- One (1) external loan for US$20 million was contracted in Quarter 2, 2019 from the International Development Association (IDA) to finance the ‘Guyana Petroleum Resources Governance and Management Project’. The Loan Agreement was signed on April 11, 2019. (For further details, see Table 10: External New Loans Contracted by the Government of the Cooperative Republic of Guyana for the period January 1 to June 30, 2019).
- Disbursements in Quarter 2 2019 amounted to US$23.8 million, a 70 percent increase from the same period in 2018. This substantial increase was mainly due to improved project implementation, especially for projects funded by external financiers such as the Exim Bank of China. Overall, disbursements for the first half of 2019 amounted to US$35.2 million, a 13.5 percent increase when compared to the same period in 2018.
- As at end-June 2019, external disbursing loans which represented about 22 percent of the external debt portfolio, remained unchanged from the first quarter of 2019.
- Net inflows increased by US$7.7 million, from US$3.1 million in quarter 2 2018 to US$10.8 million in quarter 2 2019, resulting mainly from an expansion in disbursements. Net transfers grew in quarter 2 2019 by about US$7.6 million compared to same period in 2018.
- The US dollar remained the dominant currency within Guyana’s external debt portfolio, comprising 73.4 percent at end-June 2019, while the Renminbi Yuan accounted for the second largest share at 17.8 percent. The currency composition of Guyana’s external debt portfolio renders it susceptible to exchange rate risk. A depreciation of the Guyana dollar against certain foreign currencies, in particular the US dollar, would significantly increase debt service payments in Guyana dollar terms. Notably, from mid-2018 to mid-2019, the Guyana to US dollar exchange rate moved from $208.44 to $210.45. This means that Guyana has had to pay an additional $2 million for every million US dollars spent on debt service.
- Guyana’s total public debt portfolio was not highly exposed to refinancing risk, given that total short-term debt accounted for only 20.8 percent of the portfolio at-June 30, 2019.
- Notably, the domestic debt portfolio bore a high level of refinancing risk, since 89.6 percent of the portfolio consisted of Treasury Bills (T-Bills) which have a maturity period of one (1) year or less.
Public Debt Report, Quarterly Report June 2019