Guyana’s remarkable journey to economic recovery after COVID-19

The coronavirus (COVID-19) pandemic triggered a global economic collapse and Guyana was no exception to the effects, with the cost of living rapidly increasing and putting a strain on the private sector and the average man.

Coupled with the events surrounding the March 2, 2020, General and Regional Elections, havoc unfolded leading to hundreds of persons dying from the disease and the slow down of the economy.

But, after assuming office, the People’s Progressive Party/Civic (PPP/C) Administration made several strides to push economic recovery, while implementing several measures to ease the cost of living for citizens.

In its 2020 emergency national budget, the focus was redirected towards making financial resources available to improve testing capabilities and to acquire critical pharmaceutical and healthcare supplies to bring relief to the people, while also opening up the economy and restoring economic activity to some level of normalcy.

Measures to ease the burden on citizens included $150 million to support frontline workers, reversed value added tax (VAT) on electricity and water, mortgage interest relief, increase in the limit for low-income loans for corporate tax relief in the banking sector from $8 million to $10 million and the provision of $25,000 COVID-19 relief per household, among other initiatives.

Further, in its first full-year budget in 2021, additional measures were implemented to ease the cost of living and reverse several punitive taxation measures implemented by the APNU+AFC Government. That plan also catered for countrywide development and rapid economic stimulation.

Key measures included reducing the cost of basic food and other household items, reducing the cost of construction and home ownership, removing the VAT on data for residential and individual use, and removing the duty on all-terrain vehicles (ATVs) for use in the hinterland.

Fast forward to March 2022, after nearly two years of restrictions on social, physical, and economic activity to curb the spread of the novel COVID-19, the government announced the lifting of restrictions clearing the way for a complete rebound of economic activity.

This is in addition to several key measures outlined in the 2022 National Budget geared toward accelerating economic growth and recovery.

The excise tax rate reduced further on gasoline and diesel from 20 per cent to 10 per cent, while the vulnerable were supported through the introduction of the Dialysis Support Programme where each dialysis patient will receive $600,000 annually.

The public assistance increased from $12,000 to $14,000, benefitting 18,000 persons and providing an additional $432 million in disposable income.

The old age pension was further increased from $25,000 to $28,000, placing an additional $2.3 billion of disposable income into the pockets of citizens.

Additionally, in 2022 the Because We Care cash grants increased from $15,000 to $25,000 per child, placing an additional amount of $2 billion in the homes of the same 200,150 children attending both public and private schools.

The monthly income tax threshold also increased from $65,000 to $75,000 monthly, thereby releasing a total of $1.3 billion into the hands of current taxpayers both in the public and private sectors.

Billions were also pumped over the years to support the comprehensive COVID-19 vaccination programme which has resulted in a significant decline in COVID-19 cases.