…details Govt’s mitigating impact on rise in cost of living
The local increase in commodity prices have sparked criticisms of the government, however Vice President Bharrat Jagdeo on Thursday detailed that the administration is mitigating the impact of higher costs for major imports due to external/global factors and increasing demands.
Responding to an editorial published in a local newspaper on July 8 under the caption “The cost-of-living question,” he outlined investments in the construction sector, public utilities, importation of oil, pension, public sector wages and salaries, increased employment, agriculture & food production and reduction in taxes.
Guyana’s 2023 end-of-period inflation compared to the rest of the world. (Graphic shared on President Dr Irfaan Ali’s social media page)
He noted that Guyana’s inflation rate remains low in comparison to the region.
“It is navigating a complex period when you have growth this big that you tend to have higher inflation and [there is] overheating of the economy. Look at how we have managed. And I am really proud of this, not because we did it but because as a country, we have been able –with double digit growth in our economy – our inflation rate is lower than the average inflation rate of most countries in the world and in this hemisphere,” Jagdeo said.
“Every time we get this cost-of-living thing, they don’t look at the inflation rate,” he added.
The vice president highlighted that investments into the Guyana Power and Light Company (GPL) has helped to maintain stable electricity costs. This investment, he mentioned, includes the funding for the Gas-to-Energy project, subsidising the cost of fuel and investments in updating the power distribution system.
The effects of the COVID-19 pandemic coupled with the war in Ukraine, the ongoing issue at the Gaza strip and the Houthis’ attack on ships linked to Israel, the United States or Britain as part of rebel support for the militant group Hamas, have all led to an increase in freight.
Not filtered to citizens
Noting that GPL budgeted fuel cost to be US$70 per barrel in 2024, this has increased to an average of US$104 per barrel but this increase is not filtered to citizens.
“That means, we’re putting in a subsidy of $66M to $70M US dollars into GPL this year to pay for fuel or they’ll have to increase the electricity prices to people to cover that increase in fuel costs that they incur.”
Relating to other fuel imports, he pointed out that another six million barrels of gasoline diesel is imported annually noting that the excise tax was removed subtracting approximately US$384M from the cost of this commodity. The removal of the taxes, he noted, ensured the cost of public and private transportation remains low.
“Every Guyanese have benefitted from this,” he said.
Relating to the supply of potable water, the Vice President said the cost to supply water inclusive of treatments have increased but this has not been filtered to citizens.
Instead, he pointed to an increase in public sector wages and salaries of approximately $90B since assuming office, the increased employment of persons through the Government 10-day worker programme and other initiatives, increases in pension, write-off of loans for the University of Guyana, improvement of public health facilities to reduce the cost for healthcare, as well as the opening of new sand pits and licensing of suppliers for aggregate to reduce the cost of construction.
Jageo said while the Government understands that there has been an increase in the price for certain commodities, the efforts being made to subsidise the various sectors must also be recognised.
“You have to almost every week deal with this kind of thing ‘oh pepper price gone up.’ We understand that…I know that is something [but] that is why we set aside resources to help people like the farmers with fertilisers to offset the cost,” he told reporters.
“We are now targeting different groups and we will help people, we have to do that, but you have to see the big picture on how we manage this,” he added.
In the 2024 National Budget, under a section dedicated to ‘Easing the cost of living’, the Government dedicated $7B for measures to be determined after consultations with stakeholders, aimed at maintaining production while containing the impact of price increases. Notably, the 2024 budget also allocates $6B to combat shipping costs increase for the year and $10B for the continuation and expansion of the part-time job programme.
