Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698069070739.pdf (Guyana)
GUYANA SESSIONAL PAPER NO.

2 OF 2009 NINTH PARLIAMENT OF GUYANA UNDER THE CONSTITUTION OF GUYANA FIRST SESSION 2006-2009 MID-YEAR REPORT Honourable Dr. Ashni Kumar Singh, M.P.

Ministry of Finance September 25, 2009 ____________________________________________________________________________ TABLE OF CONTENTS 1.

Introduction 2.

Global Economic Developments 3.

Domestic Economic Developments A.

Real Economic Growth B.


Balance of Payments C. Monetary Developments D. Inflation E. Fiscal Position F. Debt G. Key Sector Highlights 4.
Conclusion 1 3 5 9 11 13 13 16 16 25 GDP Growth Rates by Sector Balance of Payments Analytical Summary Appendices A1 B1 C1 Monetary Survey D1 E1 E2 E3 E4 Consumer Price Index Central Government Financial Operations Financial Operations of the Non-Financial Public Sector Public Enterprise Cashflow Central Government Abstract of Non Interest Current Expenditure by Chart of Account Central Government Abstract of Revenue by Head Central Government Summary of Capital Expenditure by Sector and Type of Financing External Debt Stock Summary Expenditure of Key Sectors E5 E6 F1 G1 26 27 28 29 30 31 32 33 35 36 38 39 1.
Introduction 1.1 The presentation of Budget 2009 on February 9th to the National Assembly under the theme Working Together – Reinforcing Resilience was reflective of our Government being ever cognisant of the threats posed by the existing global environment and the need for strong and collective efforts at the national and individual levels to ensure that we are able to weather the global economic storm.
It is in this context that the mid-year report for 2009 presents a review of the performance of the economy for the first half of the year and a revised economic outlook for the remainder of the year.

1.2 Our Government continued to emphasise that maintaining macroeconomic stability is critical to a successful development path and continued reduction of poverty.
Despite the global economic recession the budget continued to give priority to the preservation and expansion of social services and the development of critical infrastructure across the country.

1.3 The outlook for the global environment was then described as a recession with slowed and negative growth in developed countries and the probability of the recession having an even greater impact on developing countries.
While stabilisation efforts were being outlined, the timing and scope of the impact of these interventions on developed and developing countries were still uncertain.

What was clear was that the crisis would have wide ranging and differential impacts on most countries with a likelihood of poor countries facing a disproportionate share of its direct and indirect effects.
1.4 The Guyanese economy displayed striking resilience in the first half of 2009, despite depressed external demand and lower prices for certain key exports.

Sustained efforts to diversify our productive and export bases, and prudent management of our external and fiscal balances over the years, combined to enable the economy to withstand the pressure of recent external developments.
Larger amounts of resources have also been allocated to investing in critical infrastructure as well as to advancing work on restructuring the economy for greater diversification, in order to lay the foundation for sustained growth into the medium term.

1 1.5 The launching of the national policy on avoided deforestation and the initiation of a model for low carbon development provided an innovative new direction for accelerated development in our country.
The low carbon development strategy is based on the principle that environmental responsibility through the protection of standing forests is not incompatible with an accelerated national development agenda, and that the two can exist and be pursued in parallel.

1.6 These actions, supported by ongoing institutional reforms in several sectors, form the basis on which the budget was presented and is being implemented.
The challenges continue to be significant on the global front and some domestic production constraints linger in a few sectors.

Nevertheless, our Government’s unswerving commitment to macroeconomic stability is expected to see our economy continuing on a path of positive growth in the immediate future.

2 2.

Global Economic Developments 2.1 At the time of budget presentation global growth was projected at 0.5 percent.
Developments during the first half of the year have led to a projected contraction in global growth of 1.4 percent.

This is as a result of the projected growth of 1.5 percent in emerging and developing economies not being able to compensate for the projected contraction in output of 3.8 percent in advanced economies.
Notably for the emerging and developing economies, China and India are projected to continue to lead with positive growth of 7.5 percent and 5.4 percent respectively, while all of the major advanced economies are projected to end 2009 with higher negative growth than originally envisaged.

World trade volumes are projected to further decline to 12.2 percent brought on by several factors including the general decline in global demand, a shortage of trade finance and an increase in protectionist measures.
2.2 The Caribbean which was projected to grow at 1.4 percent in 2009 at the time of budget presentation is now projected to contract by 1.2 percent.

This resulted from the fall-off in global demand which led to declines in both value and volume of exports, reduced activity in critical service sectors such as tourism, along with declines in remittances and foreign direct investment in the region.
2.3 The recessionary conditions in the global economy have served to temper upward pressures on inflation which remain low at the half year.

Commodity prices have begun to recover reflecting some improvement in market outlook, depreciation in the US dollar as well as a number of commodity-specific factors.

Oil prices have started to increase due to upward movements in demand along with OPEC’s vigilance in maintaining lower production quotas and containing perceptions of oversupply on the market.
2.4 While there has been some improvement in financial conditions as a result of the bailouts and other stimulus measures which are now recorded in the trillions of US dollars, the global recession is not yet over and generally global recovery is expected to be slow and uneven.

While some banks in the US have repaid their bailout funds given under the US Troubled Asset Relief Programme the situation in Europe appears less favourable.
Globally the pace of announcements of crisis-related discretionary spending has declined and energies have been focused on the 3 development of medium term fiscal adjustment strategies to ensure fiscal sustainability going forward.

In contrast with the gloomy outlook earlier in the year there is at the half year some cautious optimism going forward for the remainder of 2009.
2.5 The global policy imperatives remain the restoration of the health of the financial sector as well as public confidence in the global systems and institutions.
The need for urgent reform of the international financial institutions is an issue that Guyana has highlighted at every available forum both regionally and internationally and will continue to advocate strongly at future meetings, including the upcoming annual meetings of the World Bank Group and the International Monetary Fund to be held in October this year.

4 3.

Domestic Economic Developments A.


Real Economic Growth 3.1 Budget 2009 projected real growth of the non-sugar gross domestic product at 1.8 percent while overall growth was projected at 4.7 percent influenced strongly by the expected recovery of sugar.

At the half year, non-sugar gross domestic product grew by 1.1 percent.

However, as a result of sugar returning the lowest first crop in over a decade, overall real output contracted by 1.4 percent.
Based on these developments, the projections for the end of year have been revised to a modest 1.5 percent non-sugar growth and 2.5 percent for overall growth.

3.2 At 83,357 tonnes, the first half sugar production was 19.3 percent down from the first-half 2008 production of 103,280 tonnes.

Higher than expected rainfall has been cited as a factor hindering the harvesting of canes.
In some fields, this caused an overflowing drainage system, which encroached upon planted canes, either destroying or rendering them difficult to harvest.

The excessive rainfall also interrupted and delayed land preparation.
This development together with the lower sugar cane yields experienced throughout the year will have direct implications for both the second crop, where expected production levels have been scaled back by some 20,000 tonnes to approximately 166,164 tonnes, as well as the annual production target which has been likewise scaled back to 249,521 tonnes down from the Budget 2009 projection of 290,000 tonnes.
This revision now results in a 10.3 percent projected growth in sugar instead of the budgeted 28.2 percent that had been forecast.

3.3 In contrast to sugar, rice was budgeted to decline by 7.1 percent with reduced production levels of 306,156 tonnes due to an anticipated turnaround in weather conditions and adverse changes in market conditions with prices expected to moderate compared to 2008 levels.
In Region 5 and some other areas of the Black Bush Polder that were flooded by the rains in late December, flood waters receded much earlier than expected thereby permitting planting and the resultant higher level of acreage sown than initially estimated by the industry.

As a consequence, the first crop production at end June of 160,868 tonnes resulted in the sector recording a more moderate shortfall of 6.7 percent relative to the 2008 first crop of 172,497 tonnes.
The reduction in the average price for paddy was offset by significant decreases in fuel and fertiliser prices.

Based on the experiences of 5 the first crop performance, the annual target is being conservatively maintained at 306,156 tonnes reflecting a decline of 7.1 percent, although the sector has signalled some possibility of higher production.
3.4 A growth rate of 3 percent had been projected for the livestock sector for 2009 primarily based on the facts that the industry was now poised to benefit from the improved breeds of cattle and the number of swine distributed in 2008, increased production of poultry meat and reduced levels of grain prices.

At the end of June poultry meat, beef and pork production had all increased over the previous year levels for the same period.
As a result, livestock production grew by 4.4 percent growth in the first half of 2009 and the budget target of 3 percent has been revised to 4 percent.

3.5 The other crops sector is estimated to have grown significantly above the path that was required for an annualised 2 percent growth, recording a 5 percent growth for the half-year.
The continued impact of the ‘Grow More Food’ campaign and the improved access of produce from Region 6 to Georgetown markets with the opening of the Berbice Bridge at the end of 2008 all converged to ensure a boost in supply of vegetables and fruits to households.

The production performance is projected to be sustained throughout the second half, with overall output for the year being revised upwards to 5 percent.

3.6 The fisheries sector was not projected to grow in 2009.
During the first half, the sector experienced an overall decline in global market share and to the Caribbean in particular, because of the decrease in number of tourists to the region as a result of the global recession as well as the continued impact of depleted fishing grounds which resulted in declines in the production of fish.

This was reflected in the contraction of the fisheries sector by 0.7 percent at the half year and as a result the budgeted position is being maintained.
3.7 The priority requirements in the new enforcement and management mechanisms by the Guyana Forestry Commission necessitated the concessionaires submitting to the Commission for approval, their annual plans for forest operations, as well as their forestry inventory data as prerequisites for consideration for the granting of permits for their continued harvesting.
This year improvements in the compliance by harvesters as well as better weather conditions for harvesting 6 contributed to the marginal growth of 0.3 percent in the forestry sector in the first half.

While the positive growth is expected to continue in the second half the budget target of 0.3 percent is being maintained.
3.8 The contrast between the mining and quarrying sector’s performance in 2008 and the expectations for 2009 was reflected in the strong positive growth in 2008 and a budgeted contraction in 2009 of 1.4 percent.

At the half-year, the sector recorded a decline of 4 percent as a result of weak performance in the bauxite subsector which outweighed the strong performance of gold and improved performance of diamond.

This has led to a contraction of 9.3 percent as the end of year projection.
3.9 Production of bauxite declined by 31.8 percent for the period reflecting declines in all grades of bauxite.

To date aluminium prices remain drastically below 2008 levels as a result of oversupply on the global market and declines in global demand for industrial metals.

Bauxite is now projected to turn in a much weaker performance and production is now projected to fall by 22.1 percent relative to 2008 levels, in contrast to the original budget projection of a 7.1 percent decline.
3.10 Gold declarations stood at 131,550 ounces by the end of June 2009, registering a 7.7 percent increase over the revised 122,106 ounces in the first half of 2008.

The dip in monthly average prices that was seen between August 2008 and February 2009 has ended, with the March 2009 average price almost the highest monthly average price in the London Gold Market since 2006.

The declaration of diamonds rose for the first time in 2 years by 5.9 percent to a record 87,346 metric carats.
Despite the market signals of price recovery for gold and the realisation of a better first-half production for diamonds, the price volatility associated with these products has led to maintaining the budgeted annual production for both resulting in declines of 1.5 percent for gold and 2.3 percent for diamonds, respectively.
3.11 Faced with the prospect of limited expansion in demand for this year and the sector’s mixed performance last year, the manufacturing sector was projected to record zero growth for 2009.

The sector continued to show a mixed performance for the first half of this year with increased production of margarine, liquid pharmaceuticals, aerated beverages, mineral and distilled water alongside declines in production for selected beverages, laundry soap, paint, oxygen and acetylene 7 and corrugated cartons.
The combined effect of this mixed performance is that the sector remained flat at the half-year and is expected to continue on the same trend and record the overall zero growth, as projected, at the end of the year.

3.12 The distribution sector recorded 3 percent growth at the first half reflecting increased imports of consumer goods and fuel and increased agricultural produce which served to bolster distributive activities.
The sector at the half-year therefore has the platform to remain on its growth path, is expected to exceed the projected annual growth target of 3.5 percent, and is estimated to grow by 4 percent by the end of the year.

3.13 The transportation and communication sector was projected to grow by 4 percent in 2009 reflecting the greater level of activities between the coastland and interior areas.
In the transportation sub-sector, the opening of the Berbice Bridge last December reflected in a definitive shift from the use of the ferry service to speed-boat service and road travel via the Berbice Bridge.

At the half-year it is estimated that the sector has achieved a 3.3 percent growth and will directly benefit from the predicted higher level of economic activity in the second half, which will put the sector on the path to achieve a growth rate of 6 percent.
3.14 The engineering and construction sector was targeted to grow by 3.8 percent based on the construction of low-income homes in new emerging housing areas and the expansion of the public sector investment programme during the year.

The estimate for the first half is that the sector grew by 2.5 percent with some public sector investment projects not commencing as early as originally anticipated.
The continuation of private construction activities and the anticipated acceleration of the public sector investment programme in the second half are expected to lead to 3 percent growth in the sector for the full year.

3.15 The financial services sector was projected to grow by 4 percent.
The commercial banking sector has established three new branches since August 2008 in Regions 2, 4 and 6, and the construction of three new branches are already underway in the Diamond area, clearly demonstrating the sector’s confidence in the economy.

On the other hand, the regional difficulties being encountered by the CL Financial Group resulted in Clico (Guyana) coming under stress.
Government’s timely intervention and the placing of the company under judicial management 8 helped to contain the impact of the company’s difficulties.

This matter is currently engaging the attention of the Courts, and Government looks forward to a timely resolution.

On the whole, the financial sector remains sound, ably managed, and well regulated.
The estimated growth of the financial services sector at the first half is 1.2 percent, reflecting more moderate expansion in private sector credit than anticipated and the sector is now projected to grow by 2 percent.

3.16 Rental of dwellings recorded 1 percent growth and is expected to maintain its target of 1.5 percent for the year while other services recorded growth of 2 percent at the half year and consequently has been revised upwards to end the year at 2.4 percent.

B.
B.

Balance of Payments 3.17 The overall balance of payments recorded a surplus of US$57.3 million at end June 2009 compared to a surplus of US$47.6 million for the corresponding period in 2008.

This is attributed to a contraction of the current account deficit by 34.7 percent or US$55.4 million primarily due to reduced imports from lower fuel prices which outweighed the US$33.2 million or 17.7 percent contraction in the capital account due to a decline in official grants and foreign direct investment.
3.18 The merchandise trade deficit improved to US$184 million, compared to the US$256.5 million deficit in the corresponding period in 2008.

This outturn is attributed to a significant contraction in imports by US$104.3 million to US$538.5 million on account of the average price of oil being lower than last year.

3.19 Export earnings of sugar recorded a 17.2 percent or US$10 million decline to US$47.8 million compared to US$57.8 million earned at end June 2008.
This outturn was attributed to a 13.7 percent decline in export volume to 75,361 tonnes due to lower production levels.

In addition, the average export price declined by 4.1 percent to US$634.8 per tonne largely on account of the impact of the second price cut of 9 percent under the Sugar Protocol from 496 euros to 448 euros per tonne which became effective October 1, 2008.
9 3.20 Rice exports earnings amounted to US$59.4 million, 17.6 percent above the US$50.5 million earned in the corresponding period in 2008.

This reflected a significant increase of 37.6 percent in export quantity of rice to 124,277 tonnes from 90,337 tonnes due to higher carry over stock levels, which outweighed the 14.5 percent decline in the average export price.

3.21 Gold exports earned US$119.8 million, some US$17.4 million or 17 percent above the level for the corresponding period in 2008.
This was primarily as a result of a 16.9 percent increase in export volume to 142,633 ounces compared to 121,975 ounces a year ago, as the scale of mining activities by small and medium classed miners increased to take advantage of the favourable world market price developments.

On the other hand, bauxite export earnings declined by US$26.1 million or 37.5 percent to US$43.5 million.
This was due to a decline in export volume by 39.1 percent or 474,749 tonnes during the review period to 740,142 tonnes from 1,214,891 tonnes at end June 2008.

This is attributed to a decline in output at both bauxite companies due to lower world market demand.

3.22 The value of timber exports totalled US$16.5 million, 30.9 percent below the level for the corresponding period in 2008, due to a decline in both plywood and other timber exports.
This reflected lower demand for timber and related products on the world market.

Other exports including re-exports declined by US$14.7 million or 17.9 percent to US$67.5 million primarily due to lower exports of diamonds, fish and shrimp.

3.23 Net payment for services amounted to US$40.8 million, a 16.2 percent or US$7.9 million decline from the US$48.7 million registered at end half year 2008.
This contraction is primarily attributed to the decline in payment for non-factor services from US$41.9 million to US$35.5 million reflecting lower freight costs.

Net payment for factor services declined by 21.9 percent to US$5.3 million attributed to higher inflows of investment income.

3.24 Merchandise imports declined by 16.2 percent or US$104.3 million to US$538.5 million.
This outturn is primarily attributed to a 26.6 percent or US$94.9 million decline in imports of intermediate goods due to declining fuel and food prices.

In addition, imports of capital goods declined by 16.1 percent or US$21 million reflecting lower imports of almost all categories of 10 machinery.

On the other hand, imports of consumption goods expanded by 7.6 percent or $11.6 million primarily due to increases in other non-durables and motor cars subcategories.
3.25 Net current transfers declined by 17.2 percent to US$120.5 million.

While worker remittances received increased from US$145 million to US$159.5 million, outward transfers increased to US$54.4 million compared to US$29.7 million a year ago.

3.26 The capital account banked a lower surplus of US$154.3 million compared with US$187.6 million a year ago.

This is primarily on account of lower disbursements, a decline in foreign direct investment and lower capital transfers.
3.27 The significant improvement in the current account outweighed the deterioration in the capital account which resulted in an overall surplus of US$57.3 million compared to a surplus of US$47.6 million for the corresponding period in 2008.

Consistent with these developments, gross international reserves of the Bank of Guyana increased from US$380.9 million or 2.7 months of imports at end June 2008 to US$431.7 million or 3.5 months of imports of goods and services at end June 2009.
C. Monetary Developments 3.28 The stock of broad money grew by 2.2 percent underpinned by the growth in net foreign assets of the banking system.

3.29 Total resident deposits increased by 5.3 percent to $197.7 billion.

Private sector deposits, which accounted for 74.9 percent of total deposits, grew by 5.3 percent compared with a 9.7 growth in the corresponding period in 2008.
3.30 Net domestic credit by the banking system contracted by 11.4 percent to $53 billion at end June 2009, compared with a decrease of 5.6 percent at end June 2008.

This outturn is attributed to a significant increase in public sector deposits.

11 3.31 Total private sector credit in the form of loans and advances remained relatively unchanged and amounted to $89.4 billion at the end of the half year.
Credit to the manufacturing sector increased by 13.1 percent and real estate mortgages and agriculture increased by 11.2 and 5.1 percent respectively.

On the other hand, loans and advances to rice milling, distribution, other services, personal, mining and quarrying and other sector declined by 22, 15.6, 3.5, 2.2, 2 and 1.5 percent respectively.
At end June 2009, the commercial banks’ major exposure to the private sector were 27 percent to real estate, 21 percent to personal, 14 percent to distribution, 11 percent to other manufacturing, 10 percent to other services, 8 percent to other, 5 percent to agriculture, and 2 percent to both rice milling and mining and quarrying.

3.32 The public sector continued to be a net depositor of funds with the banking system at end June 2009, with deposits increasing by 33.2 percent to $24.6 billion.
Net credit to the Central Government decreased by 77.3 percent to $1.3 billion, while public enterprises net deposits increased by 43.5 percent to $16.1 billion.

The other category, which includes local government and National Insurance Scheme, recorded a decrease of 24.9 percent in net deposits to $9.9 billion.
3.33 The non-bank financial institutions recorded a 6.3 percent increase in net deposits to $11.8 billion attributed to an 8.4 percent and 6 percent respective increase in deposits of the public and private non-bank financial institutions.

3.34 The net foreign assets of the banking system grew by 10.4 percent to US$506.7 million while the net foreign assets of the commercial banks contracted by 14.2 percent to US$167.1 million reflecting lower levels of foreign securities being held by banks.
Net foreign assets of the Bank of Guyana increased 28.5 percent to US$339.6 million, with foreign assets increasing by US$75.8 million and foreign liabilities by US$0.5 million during the review period.

3.35 The prime lending rate remained constant at 14.54 percent during the review period, while the small savings rate declined from 3.04 percent to 2.78 percent.
The commercial banks’ interest rate spread between the savings rate and the prime lending rate at end June 2009 was 11.8 percent compared to 11.5 percent at end December 2008.

The spread between the 91-day Treasury bill and the small savings rate expanded from 115 basis points to 140 basis points at end June 2009.

12 3.36 Total liquid assets of the commercial banks amounted to $75.5 billion, a 12 percent increase over December 2008 level.

The banks excess liquidity amounted to $31.2 billion.
Total reserves deposited with the Bank of Guyana amounted to $29.8 billion, 19.5 percent above the level at end December 2008.

The required statutory reserves of the banks amounted to $25 billion, 4.8 percent above the end December 2008 level.

Reserves in excess of the minimum requirement totalled $4.8 billion at end June 2009.

D. Inflation 3.37 With the expected effects from the global meltdown and moderating of demand on the domestic front an inflation target of 5.2 percent was set at budget.
To date inflationary pressures have remained low.

Supporting the respite in fuel prices, the abundance of vegetables on the market with lower prices for the greater part of the first half have directly restrained the increases in overall food prices.

Consequently, the movement of the consumer price index at the half-year is estimated to be 1.3 percent.

3.38 The caution and prudence demonstrated thus far by consumers are expected to continue into the second half.
Based on the inflation trend in the first half and the stated anticipation in consumer behaviour for the rest of the year, the inflation target has been scaled back from the budgeted 5.2 percent to a revised 3.2 percent.

E. Fiscal Position 3.39 In the first half of 2009, the non financial public sector generated a surplus of $5.1 billion compared to $1.9 billion for the same period of the previous year.
This performance is in keeping with the budgeted reduction in the deficit to GDP ratio to 6.5 percent for 2009 from 7.9 percent achieved in 2008.

3.40 During the first half of 2009 central government revenues amounted to $48.4 billion or $6.1 billion over that of 2008.

Value added and excise taxes amounted to $21.3 billion as compared to 13 $17.6 billion at the first half of 2008, with total excise taxes moving to $10.4 billion from $6.7 billion.
This increase in excise tax resulted from Government reinstituting taxes on petroleum as a result of lower world market prices as compared to 2008 when these taxes were significantly reduced to assist in minimising the impact of the then steadily increasing fuel prices.

The adjustments to the excise tax rate on petroleum led to a net increase of some $2.9 billion in 2009, while the contribution of motor vehicle excise amounted to $0.7 billion as a result of a 22.7 percent increase in motor vehicle imports.
On the other hand collections from the value added tax declined from $11 billion to $10.9 billion.

3.41 First half 2009 internal revenue collections amounted to $20.2 billion or $1.2 billion in excess of collections for the same period in 2008.

With respect to personal income taxes, PAYE generated a 5 percent or a $300 million increase which could be attributed to increased income levels.
Taxes collected from the self employed generated an increase of 19.3 percent above the 2008 level with a collection of $1.1 billion, while company taxes from the private sector exceeded their 2008 collections by 3.7 percent.

3.42 Customs and trade taxes totalled $3.4 billion representing a 9.3 percent increase over 2008.
The major contributor continues to be import duties which generated $3 billion or 11.1 percent more than that of 2008, resulting from an increase in the value of consumption goods and selected categories of non-durables and motor vehicles.

3.43 Collections from the non-tax category during the first half of 2009 exceeded 2008 by 46.8 percent with a collection of $3.5 billion, which mainly resulted from the receipt of $2.3 billion in Bank of Guyana profits as against $1.1 billion in 2008.
3.44 In light of the first half performance total projected revenue for the year has been revised to $91.9 billion.

3.45 During the first half of 2009, total expenditure amounted to $45.8 billion or 2.1 percent less than expenditure in 2008.

Current expenditure amounted to $34.6 billion, 1 percent or $300 million more than 2008.
14 3.46 Personal emoluments increased by 10.2 percent to $12.1 billion as a result of a combination of salary increases awarded in 2008 and annualised in 2009 and the integration of the Temporary Cost of Living Adjustment (TCLA) with effect from January 2009 into the salaries of all persons earning less than $50,000 during 2008.
Additionally, expenditure for transfer payments which amounted to $9.4 billion reflected a 6 percent increase during the period January to June 2009, and was accounted for mainly by increases in education grants and pension increases.
3.47 Expenditure on goods and services recorded a decrease for which the main contributor was the significant reduction in the international price of fuel as reflected in the 22.5 percent reduction in expenditure on fuel and lubricants from $711.8 million in 2008 to $551.7 million during the same period in 2009.
Increases in expenditure were recorded in the areas of materials and supplies largely as a result of the costs associated with the operationalisation of the four new diagnostic centres from January 1, 2009 giving the citizens of Guyana widespread options regarding health facilities and services.

3.48 Capital expenditure totalled $11.2 billion during the first half of 2009, a decrease of 10.5 percent relative to 2008.
While there were several areas of increased expenditure namely health, housing, water, transport and communication, there were also some delays as a result of logistical and other issues in the area of energy and other infrastructure.

3.49 As a result of the aforementioned developments total expenditure has been revised downward to $126.4 billion or 1.1 percent less than the budgeted $127.8 billion.
3.50 Some $3.1 billion was received in grants reflecting $7 billion less than what was received during the same period in 2008.

The revised projection for grants is $15.2 billion.

3.51 At the end of the first half of 2009, the overall performance of public enterprises reflected a deficit of $0.7 billion as against a deficit of $3.8 billion for the same period of 2008.
Guyana Power and Light Inc. recorded a surplus of $1.5 billion in first half of 2009 as compared to a deficit of $91.0 million recorded for the same period in 2008, while Guyana Oil Company Ltd. realised a surplus of $1.3 billion during the period under review in 2009 as compared to $517.2 million for 2008.

The main contributor to this improved performance was the reduced cost of fuel.
Guyana Sugar Corporation Inc. (Guysuco) recorded a deficit of $2.1 billion, compared with $2 billion in 15 2008, as a direct result of a shortfall in its production target which impacted directly on export volumes.
Taxes paid to Central Government during the first half of 2009 were $168.1 million more than that of 2008 as a result of higher payments by Guyana Oil Company Ltd. 3.52 The 2009 overall deficit of the non-financial public sector was projected to improve to $16.7 billion as against the actual deficit of $18.5 billion in 2008.

Against this background of the fiscal developments reported, the overall fiscal balance is now projected at a deficit of $18.5 billion.
F. Debt 3.53 Guyana’s total external public debt rose by US$27.2 million from December 2008 to US$861.5 million at end-June 2009 with the IDB and Venezuela accounting for a gross increase of US$31 million of the total debt stock.

3.54 In the first half of 2009, total actual external debt service payments amounted to US$6.8 million, declining by 22.5 percent below the total actual debt service payments of US$8.8 million for the same period in 2008.
The overall decline in total actual debt service was due to a drop in central government principal repayments by about 39.8 percent.

This reduction can be attributed mainly to savings from debt relief obtained from IDB and World Bank (IDA) under the Multilateral Debt Relief Initiative (MDRI).

G. Key Sector Highlights a.


Education 3.55 An allocation of $20.4 billion was budgeted for the education sector, of which $8.2 billion, approximately the same level as the previous year, was expended during the first half of 2009 towards the continued implementation of the updated 5 year National Education Strategic Plan.
The period saw extensive collaboration between the Ministry of Education and the ten Administrative Regions towards the production of action plans intended to foster synergies among the education 16 districts in relation to priority areas identified in the Strategic Plan.
The Ministry of Education, in its effort to ensure that the plan is efficiently and effectively executed, is establishing an internal web- based monitoring system which will set out indicators and time frames for each activity to be measured.
3.56 Additionally, the continued commitment to the monitoring of schools by the Monitoring, Evaluation, Reporting and Development Unit has resulted in 56 schools being visited in the first half of 2009, assessing areas such as punctuality and attendance, inventory of staff, classroom management, teaching-learning processes and child friendliness.

This complements the national policy on increased frequency of supervisory visits made by the District Education Officers to schools throughout the country.
3.57 During the first half of the year $62 million was spent on the ongoing implementation of the literacy initiative, with 36 literacy educators being added to the system, bringing the total number of literacy educators to 323, spread across 151 centres countrywide.

The first Literacy Educator Basic Course designed to prepare Literacy Educators for their responsibilities was delivered and consisted of 80 participants across the country.
Further, suitable persons from within 30 neighbourhood democratic councils (NDCs) and community development councils (CDCs) are expected to be identified to be trained as Literacy Volunteers who will in turn train adults within their communities.
3.58 In keeping with the objective of achieving universal secondary education, revisions to the curriculum guides are currently being finalised, and teacher training has commenced in 25 schools in Regions 1, 3, 4, 5 and Georgetown aimed at achieving the introduction of the 6 year programme into 40 schools over the 5 year period.
This is expected to positively impact the number of students and their performance in the core subjects of Mathematics and English, reduce repetition, and ultimately lead to significant improvement in performance at the upper levels in secondary and regional examinations.

3.59 Over $238 million has been expended during the first half of the year on the hinterland school feeding programme to maintain the programme in the 60 schools within the hinterland regions.
Our Government is now expanding this programme to 24 new schools.

To this end, these schools have been allocated investment funds to commence the rehabilitation of their kitchens.
17 3.60 In keeping with the National Policy objective of increasing the proportion of trained teachers in the system to 70 percent by 2013, the Cyril Potter College of Education continues to provide the education system with academically and professionally trained teachers at the Nursery, Primary and Secondary levels, with over 500 students being admitted into the current academic year.
Additionally, modules for the commencement of the Distant Education Programme have been written and will be distributed during the second half of the year.

3.61 The construction, upgrading and maintenance of educational facilities remains a priority, and our Government has spent $429 million in the first half of the year on nursery, primary, secondary schools, and tertiary institutions countrywide, of which $106.7 million was expended towards the construction of Hope Secondary school.
The remaining $2.1 billion is expected to be spent in the second half of the year, with the majority of maintenance taking place during the July/August term break to minimise disruption of classes.

Additionally, construction of 2 nursery schools at Bath and Cumberland is expected to commence in the second half of the year, along with works at primary schools in Semoni, Parfaite Harmonie and Belle West, whilst secondary schools at Hope and No.
8 Village are projected to be completed in the second half of 2009. b.

Health 3.62 The health sector was budgeted to spend $12.8 billion, of which $6.2 billion was expended at the half year reflecting a $1.4 billion increase over the same period last year.

This increased investment has achieved significant healthcare benefits including the operationalisation of the four new diagnostic centres.
3.63 Government’s investment in the construction, expansion, rehabilitation and maintenance of health facilities across the country has borne fruit.

At mid year $327 million was expended on the completion of the Linden Hospital Complex while construction commenced on the new in-patient facility at Georgetown Public Hospital Corporation (GPHC).

Final construction and installation of equipment for the Lethem and Mabaruma Hospitals were completed and these hospitals are now functional in their new buildings.
To date $10.4 million was expended towards the National 18 Psychiatric Hospital to provide a more habitable and patient friendly environment for more than 150 patients.

The National Ophthalmology Hospital is completed and staffed, and is expected to be fully operational by the third quarter.

During the first half of the year preliminary screening of over 6,000 patients was conducted of which 525 were identified for surgery.
This 50 bed facility is equipped with two refraction rooms, an optical laboratory, 6 ophthalmic consultation rooms and three operating theatres which include a state of the art laser surgical theatre.

3.64 The National Referral Hospital or GPHC has improved its emergency care services and response system with an increased fleet of 5 ambulances and is now able to offer 24 hours service 7 days a week.
GPHC is currently embarking on the sterilisation of hospital infectious waste and the safe management of biomedical waste.

Construction and installation of equipment have started and the facility is expected to be completed by December.

The development of this new state of the art processing facility will allow hospitals and other health facilities the most advanced technology in medical waste disposal and is expected to be operational before end of year.
3.65 In an effort to further expand and consolidate the human resource skills of the sector, another batch of 66 Cuban trained medical doctors will graduate after completing their internships and will be placed at various hospitals and health centres, while another contingent will begin their one year internship in September.

This will provide a tremendous boost to the regional health system.
In addition, 726 Nurse Trainees and 38 Clinical Technical Trainees are currently in training and the division intends to commence training in the second half of the year of another 325 Nurses and 211 in Clinical and Technical categories.

At mid-year 39 community health workers, 7 community dental therapists and 18 dentex graduated and were appointed across the country, while 11 others will complete the dentex diploma programme in November.
By the end of the year 54 Professional Nurses, 62 Nursing Assistants, 38 Midwives and 18 medical laboratory technicians will graduate.

3.66 Under the Basic Nutrition Programme $140 million was expended.

This resulted in the distribution of 1,557,560 sachets of infant sprinkles to 10,892 beneficiaries and 630,000 sachets of antenatal sprinkles to 3,500 beneficiaries and 65,352 coupons to 10,892 beneficiaries.
In addition mothers were educated in the Knowledge, Attributes and Practices of complementary feeding of children ages 2-24 months.

19 3.67 In an effort to reduce drug demand and promote awareness of mental health issues workshops were held to educate persons from NGOs, faith-based organisations and health care workers from both the private and public sectors in the areas of substance abuse, anxiety and depression.
Consultations with key stakeholders were completed and the establishment of a working group to assist with drafting of the mental health legislation for Guyana is currently ongoing.

3.68 In light of the current global influenza pandemic the Ministry has implemented the National Influenza Pandemic Preparedness Plan with emphasis on swine flu and emerging H1N1 virus and established a National Outbreak Investigation Team to deal with suspected cases.
To date over 30,000 doses of seasonal influenza vaccines have been administered to frontline persons at ports of entry, medical personnel, members of the disciplined services, and the elderly.

c. Agriculture 3.69 Under the agriculture diversification programme, implementation of a number of initiatives geared towards the expansion and development of the non-traditional subsectors commenced during the first half of the year.
Preparatory work has begun for the rehabilitation of the germplasm laboratory and seed facilities at National Agricultural Research Institute (NARI) and the construction of the genetic bank at National Dairy Development Programme (NDDP).
In addition, the Rural Enterprise and Agriculture Development (READ) programme focused on capacity building amongst small farmers, households, women and indigenous people through the hosting of seminars and awareness campaigns in Regions 2, 3 and 5, informing over 1,000 small farmers on the opportunities available for them to get involved in agriculture diversification and livestock farming.
Business facilitation centres were also identified to provide market opportunities for approximately 28,000 residents in regions 2, 3, 4, 5, 6 and 10.

3.70 The swine multiplication programme saw the distribution of 118 swine during the first half of 2009, benefiting 118 farmers in Regions 2, 3, 4, 5, 6, 7 and 10.

During the second quarter, 247 swine are expected to be distributed to farmers countrywide.

In addition, training will be done in all 20 communities which are in receipt of breeding materials.
Since the implementation in 2008, 411 swine have been distributed for breeding purposes.

d. Infrastructure 3.71 In 2009, an allocation of $7 billion was made towards improving our country’s roads and bridges network of which $5 billion was allocated for roads and $2 billion for bridges.

At the end of the first half of the year expenditure of $1.9 billion and $353 million was expended on roads and bridges respectively as compared to $1.3 billion and $204.6 million in 2008.
3.72 An allocation of $1.8 billion was made towards the completion of the New Amsterdam to Moleson Creek Highway, of this amount $720.7 million was expended in the first half of the year towards the completion of 25 kilometers of roadway which represents more than half of the 40 kilometers expected to be completed by the end of the year.
Further, the approach access roads to the Berbice Bridge have been completed reflecting $603 million expended at the half year solidifying a critical link to the key coastal highway which provides the only land transport link to Suriname.

Once completed, this will improve access to an important agricultural zone and facilitate regional integration between Guyana and Suriname.
3.73 The rehabilitation and maintenance of urban, rural and hinterland roads continued with $374 million expended during the first half of the year.

Additionally, 215 of the 239 road projects identified this year have begun and works are ongoing in all the regions including areas such as Hague Road, De Hoop Branch Road, Mahaicony Branch Road and Friendship South Middle Road.

3.74 In its efforts to promote safety on our roadways Government continues to invest in street lighting infrastructure.
The Budget 2009 catered for the installation of street lights along the East Bank of Demerara Public Road, at the end of the first half of the year street lights had been installed from Farm to Friendship and Soesdyke to Timehri.

21 3.75 Of the $2.2 billion budgeted for the continued construction, rehabilitation, restoration and maintenance of the sea and river defence structures, $265 million was spent at the half year to effect works in Regions 3, 4, 5, 6, 7 and 10.
3.76 In the first half of 2009, $1.3 billion was spent on the rehabilitation of drainage and irrigation structures.

Special emphasis was placed on the northern embankment of the East Demerara Water Conservancy (EDWC) where eight miles of buttress and structural strengthening were completed between Flag staff and Nabaclis and internal water ways were rehabilitated between Annandale and Lama main creek.
Under the Agriculture Support Services Programme (ASSP) and Agriculture Export Diversification Programme (AEDP), 146 miles of canals and drains were rehabilitated.

These works have benefited Vergenoegen/Bonasika and Den Amstel/Fellowship, Vreed en Hoop/La Jalousie, Golden Grove/Victoria and Canals Polder 1 and 2.

In addition, two excavators and two bull dozers were purchased and deployed to areas in Regions 3, 4 and 5.
Rehabilitation of Stanleytown pump station was completed while works at Liliendaal, and Kitty pump stations have commenced.

3.77 Geotechnical and hydrological studies have commenced for the Hope outfall channel to determine the most suitable option in allowing the discharging path of the new canal’s outlet.

3.78 With respect to electricity, the Government in 2008 signed a US$31.4 million agreement with GPL which allows for improved generating capacity and transmission and distribution upgrade.
One of the components of the agreement is the construction of a power plant at Kingston which will use a modern Wartsila engine and will result in increased generation capacity by 20.7 megawatts.

The Kingston plant will be interconnected to a 69 KV substation in Sophia via transmission lines that will be run along the Lamaha railway embankment.

Other components of the agreement are the rehabilitation of the Canefield station and the completion of the 69 KV link between Skeldon and No 53 Village.
During the first half expenditure of US$2 million was made towards foundation works, the supply and installation of a 35 MVA transformer for the Kingston plant, works on the Kingston to Sophia and the Skeldon to No 53 Village transmission lines in addition to commencement works on the rehabilitation of the Canefield station.

22 3.79 Under the Unserved Areas Electrification Programme $750 million was allocated in 2009 of which $276.5 million was spent in the first half of the year.
Under this Programme GPL continued its project to ascertain the accuracy of billings, metering and service connections with the aim of reducing non- technical losses through corrective action.

To this end, 1,435 defective meters were changed in the first half of the year.

During the same period the electrification of Orealla and Siparuta has been completed.

Presently, 138 households are connected and receiving electricity for 5-6 hours per day in the two communities.
The other households will be connected by the end of the year and when completed some 2,000 households are expected to benefit.

e. Housing and Water 3.80 The housing and water sectors received an allocation of $5.4 billion in the 2009 budget to accelerate our Government’s programme of providing access to affordable housing and ensuring increased coverage of water supply.
At the end of June approximately $1.9 billion dollars was expended, representing a 29.6 percent increase on the 2008 mid year expenditure.

This increased expenditure is attributed to earlier completion of designs and more timely approval of projects.
3.81 In the first half of the year, $657.9 million was expended to increase occupancy and construction rates in existing and new housing areas, to improve infrastructure in housing schemes and squatter settlements and to provide security of tenure in several areas including Parfaite Harmonie, Block 8 Mon Repos and No.

77 Village.

The first half of 2009 saw the revival and expansion of the One Stop Shop outreach to communities in Regions 2, 3, 4, 5, 6, 9 and 10.
The One Stop Shop outreaches are aimed at bringing housing services offered directly to communities and are intended to drastically reduce transaction time between housing applications and allocations.

It also provides the opportunity for customers to query water bills, settle complaints and make leak reports in relation to water.
The seven One Stop Shop outreaches conducted contributed greatly to the achievement of 1,773 house lots allocated reflecting 88.6 percent of the 2,000 lots targeted and 3,260 land titles granted reflecting 130 percent of the 2,500 land titles targeted for processing and distribution thereby surpassing the latter target.
23 3.82 In the water sector, progress continued towards ensuring increased coverage and improved quality of water supply, improved efficiency and the reduction of losses in the production and distribution of potable water.

To this end approximately $1.2 billion was expended at the half year.
3.83 Under the Linden Water Programme (LWP) and the Hinterland Water Programme (HWP) - with allocations of $50 million each, approximately $7.9 million and $8.3 million were disbursed for the procurement of leak repair materials, and the construction of concrete trestles for the LWP and the HWP respectively.
The Linden Programme is expected to benefit 7,000 residents in Wismar Housing Scheme, Amelia’s Ward and Blue Berry Hill, while the Hinterland Programme is expected to benefit approximately 8,000 residents in areas such as Mabaruma, Port Kaituma, Ituni, Orealla and Siparuta.

24 4.
24 4.

Conclusion 4.1 Budget 2009 was prepared in a global context that was characterised by projected slow global growth in real output and, indeed, contraction in the advanced economies and the emergence of a recession in the developed world.

Even at that time, the implications of the crisis for the Caribbean Region were recognised, with key sectors such as tourism reflecting immediate transmission of the external conditions.
This adverse external outlook manifested itself in the first half of 2009, notwithstanding that the prospect of global recovery appeared nearer and less uncertain at the mid-year than at the start of the year.

On the other hand, the impact on the Caribbean Region was more severe than anticipated, and certain structural weaknesses in some of the Region’s domestic economies were exacerbated.

Despite the cautiously optimistic outlook for the remainder of the year, key risks remain.
The domestic economy remains vulnerable to external developments, and performance at the end of the year will be subject to global economic conditions.

4.2 Despite these external conditions and local challenges such as those known to be confronting the sugar industry, the domestic economy was projected to continue to grow.

At the end of the first half of the year, the non-sugar economy recorded positive growth, with expansion in output reflected across a broad base of sectors.
This result undoubtedly demonstrated early returns to Government’s efforts at diversification, with the strongest rates of growth achieved in non- traditional agriculture sub-sectors.

That notwithstanding, difficulties were encountered in some traditional sectors.
In particular, the bauxite industry responded to depressed global market conditions and low prices with reduced production while the sugar industry continued the search for solutions to overcome its domestic challenges, foremost amongst these being the productive output of the sector and the financial performance of Guysuco.

On balance, the economy is still projected to achieve positive growth at the end of the year and continued macroeconomic stability is expected to be maintained.
25 APPENDICES APPENDIX A1 MID-YEAR GDP GROWTH RATES BY SECTOR ITEM SUGAR RICE LIVESTOCK OTHER CROPS FISHING FORESTRY MINING & QUARRYING MANUFACTURING DISTRIBUTION TRANSPORTATION & COMMUNICATION ENGINEERING & CONSTRUCTION RENT OF DWELLINGS FINANCIAL OTHER GOVERNMENT TOTAL 2008 ACTUAL 2009 BUDGET -15.1 10.5 7.4 7.7 -2.0 -15.2 6.1 -2.0 11.8 9.9 8.5 4.5 12.0 7.0 1.0 3.1 28.2 -7.1 3.0 2.0 0.0 0.3 -1.4 0.0 3.5 4.0 3.8 1.5 4.0 2.0 0.0 4.7 2008 H1 2.3 2.1 9.6 9.5 0.0 -23.0 15.2 -3.0 11.0 4.5 4.6 3.0 8.5 8.4 0.0 3.8 2009 H1 -19.3 -6.7 4.4 5.0 -0.7 0.3 -4.0 0.0 3.0 3.3 2.5 1.0 1.2 2.0 0.0 -1.4 Non-Sugar GDP Growth Rate 5.9 1.8 4.0 1.1 2009 REVISED 10.3 -7.1 4.0 5.0 0.0 0.3 -9.3 0.0 4.0 6.0 3.0 1.5 2.0 2.4 0.0 2.5 1.5 Mid-Year Report 2009 Source: Bureau of Statistics 26 GDP Growth Rates by Sector ITEM A Current Account 1.0 Merchandise (Net) 1.1 Exports (f.o.b.)
1.1.1 Bauxite 1.1.2 Sugar 1.1.3 Rice 1.1.4 Gold 1.1.5 Timber 1.1.6 Other 1.1.7 Re - exports 1.2 Imports (c.i.f.)
1.2.1 Fuel & Lubricants 1.2.2 Other Services (Net) 2.1 Factor 2.2 Non Factor (Net) Transfers 3.1 Official 3.2 Private 2.0 3.0 B Capital Account 1.0 Capital Transfers 2.0 Medium and Long Term Capital (Net) 2.1 Non - Financial Public Sector Capital (Net) 2.1.1 Disbursements 2.1.2 Amortization 2.1.3 Other 2.2 Private Sector (Net) 3.0 Short Term Capital C D E Errors and Omissions OVERALL BALANCE Financing 1.0 Bank of Guyana net foreign assets 2.0 3.0 Change in Non-Financial Public Sector Arrears Exceptional Financing 3.1 Debt Relief 3.2 Balance of Payments Support 3.3 Debt Forgiveness 3.4 Debt Stock Restructuring APPENDIX B1 MID-YEAR BALANCE OF PAYMENTS ANALYTICAL SUMMARY 2008 ACTUAL 2009 BUDGET (299.1) (501.8) 798.4 131.1 133.4 118.0 203.7 53.8 149.2 9.2 (1,300.2) (406.8) (893.5) (126.1) (14.8) (111.3) 328.8 - 328.8 305.7 38.7 272.8 93.7 186.6 (45.6) (47.2) 179.1 (5.8) 0.4 7.0 (7.0) (44.8) - 37.8 4.7 - 33.7 (0.6) (288.7) (420.5) 763.5 114.7 153.2 113.6 165.5 54.5 145.0 17.0 (1,184.0) (314.6) (869.4) (128.2) (23.6) (104.6) 260.0 - 260.0 274.8 36.8 270.0 108.0 198.6 (42.7) (47.9) 162.0 (32.0) 0.0 (13.9) 13.9 (30.0) - 43.9 11.7 - 32.8 (0.6) 2008 H1 (159.6) (256.5) 386.4 69.6 57.8 50.5 102.4 23.9 77.6 4.6 (642.9) (207.1) (435.8) (48.7) (6.8) (41.9) 145.6 - 145.6 187.6 21.7 171.4 44.6 90.0 (21.9) (23.5) 126.8 (5.6) 19.6 47.6 (47.6) (66.4) - 18.8 2.3 - 16.8 (0.3) 2009 H1 (104.2) (184.0) 354.6 43.5 47.8 59.4 119.8 16.5 60.6 6.9 (538.5) (130.4) (408.2) (40.8) (5.3) (35.5) 120.5 - 120.5 154.3 9.2 117.8 2.7 32.7 (20.3)
 (9.7) 115.1 27.4 7.2 57.3 (57.3) (75.4) - 18.1 2.3 - 16.1 (0.3) 2009 REVISED (281.7) (423.7) 686.3 90.0 95.0 110.0 204.0 44.6 125.0 17.7 (1,110.0) (300.0) (810.0) (108.0) (18.0) (90.0) 250.0 - 250.0 263.2 34.9 216.3 84.3 158.1 (42.7) (31.1) 132.0 12.0 4.6 (13.9) 13.9 (30.0) - 43.9 11.7 - 32.9 (0.6) Figures: US $m Mid-Year Report 2009 Source: Bank of Guyana 27 Balance of Payments Analytical Summary APPENDIX C1 MID-YEAR MONETARY SURVEY 1.0 Total Money & Quasi Money 1.1 Money 1.1.1 Currency 1.1.2 Demand Deposits
 1.2 Quasi Money 1.2.1 Time Deposits 1.2.2 Savings Deposits 2.0 Domestic Credit (Net) 2.1 Public Sector (Net) 2.1.1 Central Govt.
(Net) 2.1.2 Public Enterprises (Net) 2.1.3 Other Public Sector (Net) 2.2 Private Sector 2.2.1 Agriculture 2.2.2 Other Manu.

& Process.

2.2.3 Rice Milling 2.2.4 Distribution 2.2.5 Personal 2.2.6 Mining & Quarrying 2.2.7 Other Services 2.2.8 Real Est.

Mortg.

loans 2.2.9 Other 2.3 Financial Insts.
3.0 Foreign Assets (Net) 3.1 Assets 3.2 Liabilities 4.0 Other Items (Net) 2008 December 184,153.0 61,035.3 34,552.4 26,482.9 123,117.7 15,645.9 107,471.8 59,831.9 (18,490.0) 5,843.6 (11,205.3) (13,128.3) 89,334.6 3,934.1 8,806.1 2,852.4 14,605.7 19,238.2 1,674.3 9,275.0 21,910.3 7,038.5 (11,012.6) 94,201.0 122,611.4 (28,410.4) 30,120.0 2008 H1 174,210.3 55,302.8 28,916.7 26,386.2 118,907.4 16,872.3 102,035.2 42,479.3 (24,385.7) (1,708.9) (10,433.2) (12,243.6) 77,537.2 3,518.3 8,450.5 1,711.9 11,681.5 17,610.4 1,568.3 7,620.1 18,585.8 6,790.3 (10,672.2) 97,967.0 128,196.5 (30,229.4) 33,764.0 2009 H1 188,227.0 60,432.8 31,937.8 28,495.0 127,794.2 18,326.0 109,468.2 53,016.2 (24,620.1) 1,325.4 (16,082.2) (9,863.2) 89,351.6 4,135.2 9,959.7 2,224.4 12,327.1 18,817.0 1,640.0 8,945.7 24,373.0 6,929.5 (11,715.3) 103,615.4 133,295.1 (29,679.7) 31,595.4 Figures: G $m Mid-Year Report 2009 Source: Bank of Guyana 28 Monetary Survey APPENDIX D1 MID-YEAR CONSUMER PRICE INDEX 2008 DEC 2008 JUNE 2009 JUNE ALL ITEMS FOOD CLOTHING FOOTWEAR AND REPAIRS HOUSING FURNITURE TRANSPORT & COMMUNICATION MEDICAL & PERSONAL CARE 265.9 285.9 84.7 78.9 296.5 168.9 282.3 292.5 264.4 269.4 279.0 274.1 85.1 86.6 72.8 79.0 288.2 328.9 161.4 169.3 319.2 284.6 292.4 289.9 EDUC., RECR.
AND CULTL.

SERVICE 273.6 273.4 275.7 MISC.
GOODS & SERVICES Mid-Year Report 2009 29 Consumer Price Index Source: Bureau of Statistics 221.8 214.5 215.6 APPENDIX E1 MID-YEAR CENTRAL GOVERNMENT FINANCIAL OPERATIONS Total Revenue Revenue Tax Income taxes Consumption taxes Trade taxes Other Non-tax Private sector Public enterprise & BOG 2008 ACTUAL 82,963.1 82,484.1 79,133.9 31,241.6 37,109.3 7,754.6 3,028.4 3,350.2 2,121.4 1,228.8 2009 BUDGET 90,285.1 90,285.1 86,387.3 33,750.6 41,266.6 7,931.6 3,438.5 3,897.8 2,192.8 1,705.0 Total expenditure 114,475.7 127,766.7 Current expenditure Non-interest expenditure Personal emoluments Other goods and services Transfer Payments Transfers to the private sector Transfers to the public sector Interest External Domestic Primary balance Current balance Capital Revenue Capital Expenditure 78,086.1 71,538.5 23,911.4 24,256.3 23,370.9 20,071.7 3,299.1 6,547.6 3,571.8 2,975.8 10,945.6 4,398.0 479.0 36,389.6 81,264.2 74,494.6 26,623.2 26,759.1 21,112.3 21,112.3 - 6,769.6 3,384.9 3,384.7 15,790.5 9,020.9 - 46,502.6 Overall Balance before Grants (31,512.6) (37,481.6) Grants HIPC relief Original Enhanced CMCF MDRI Other Projects Non-projects 16,550.0 2,938.4 - 596.8 513.9 1,827.7 13,611.6 5,335.0 8,276.6 18,831.1 2,751.0 - 1,107.1 257.0 1,386.9 16,080.1 7,916.0 8,164.1 Overall Balance after Grants (14,962.6) (18,650.5) Financing Net External Borrowing Disbursments of Loans Debt Repayments Rescheduling Guysuco - Escrow A/C Overseas Deposit Net Domestic Borrowing Net Divestment Proceeds 14,962.6 15,026.2 27,375.3 3,017.4 956.7 -
 (10,288.5) (63.5) - 18,650.5 21,338.2 33,509.4 2,320.5 922.1 - (10,772.8) (2,687.7) - 2008 H1 42,316.0 42,287.0 39,900.4 16,968.4 17,759.2 3,298.2 1,874.6 2,386.6 1,282.8 1,103.8 46,771.3 34,245.6 30,998.6 11,008.3 11,147.0 8,843.3 8,843.3 - 3,247.1 1,589.9 1,657.1 11,288.4 8,041.4 29.0 12,525.6 (4,455.3) 10,149.6 1,464.2 - 293.9 257.0 913.4 8,685.4 2,289.6 6,395.8 5,694.3 (5,694.3) 5,156.7 11,764.7 1,338.1 479.2 - (5,749.1) (10,851.0) - 2009 H1 48,417.3 48,417.3 44,914.9 18,037.2 21,318.7 3,635.5 1,923.5
 3,502.4 1,201.1 2,301.3 45,776.3 34,571.4 30,922.8 12,135.8 9,408.8 9,378.2 9,378.2 - 3,648.6 1,632.8 2,015.7 17,494.5 13,845.9 - 11,205.0 2,641.0 3,143.2 1,240.6 - 293.5 257.0 690.2 1,902.5 1,902.5 - 5,784.2 (5,784.2) 3,867.0 6,487.2 1,141.0 459.4 - (1,938.6) (9,651.1) - 2009 REVISED 91,853.8 91,853.8 86,663.9 32,792.1 42,713.1 8,114.9 3,043.8 5,189.9 2,733.6 2,456.3 126,354.2 81,484.3 74,828.7 26,639.3 27,008.5 21,180.9 21,180.9 - 6,655.6 3,345.1 3,310.5 17,025.2 10,369.6 - 44,869.9 (34,500.3) 15,232.5 2,754.4 - 587.2 783.6 1,383.6 12,478.1 7,473.1 5,005.1 (19,267.8) 19,267.8 18,734.8 26,450.9 2,319.8 919.8 - (6,316.0) 533.0 - Figures: G $m Mid-Year Report 2009 30 Central Government Financial Operations Source: Ministry of Finance APPENDIX E2 MID-YEAR FINANCIAL OPERATIONS OF THE NON - FINANCIAL PUBLIC SECTOR ITEM 2008 ACTUAL 2009 BUDGET 2008 H1 2009 H1 2009 REVISED Non-Financial Public Sector Revenues Central Government Public Enterprises 84,835.6 82,963.1 1,872.5 97,793.9 90,285.1 7,508.8 41,169.0 42,316.0 -1,147.0 50,101.3 48,417.3 1,684.0 100,814.8 91,853.8 8,961.0 Total Expenditure 119,916.4 133,347.2 49,381.6 48,181.3 134,508.5 Current Expenditure Non-Interest Expenditure Personal Emoluments Other Goods and Services Transfer Payments Transfers to the Private Sector Transfers to the public sector Interest External Domestic Current Balance Capital Revenue Capital Expenditure Central Government Public Enterprises 78,086.1 71,538.5 23,911.4 24,256.3 23,370.9
13,610.0
5,580.5 15,135.9 12,525.6 2,610.3 13,610.0 11,205.0 2,405.0 53,024.2 44,869.9 8,155.3 Overall Balance before Grants -35,080.8 -35,553.3 -8,212.6 1,920.0 -33,693.6 Grants HIPC Relief Other 16,550.0 2,938.4 13,611.6 18,831.1 2,751.0 16,080.1 10,149.6 1,464.2 8,685.4 3,143.2 1,240.6 1,902.5 15,232.5 2,754.4 12,478.1 Overall Balance after Grants -18,530.8 -16,722.2 1,937.0 5,063.2 -18,461.1 Financing Net External Borrowing Net Domestic Borrowing Net Divestment Proceeds 18,530.8 16,504.7 1,824.6 201.6 16,722.2 21,132.8 -4,410.6 0.0 -1,937.0 8,210.7 -10,147.7 0.0 -5,063.2 8,463.1 -13,526.2 0.0 18,461.1 20,292.4 -1,861.8 30.5 Figures: G $m Mid-Year Report 2009 Source: Ministry of Finance 31 Financial Operations of Non-Financial Public Sector APPPENDIX E3 MID-YEAR PUBLIC ENTERPRISE CASH FLOW ITEM 2008 2009 ACTUAL BUDGET 2008 H1 2009 H1 2009 REVISED Receipts Enterprises NIS 101,819.0 91,334.9 110,701.4 99,467.0 46,072.8 41,414.8 39,207.7 34,464.6 95,041.5 84,137.1 10,484.1 11,234.4 4,658.0 4,743.1 10,904.4 Contributions Investment Revenue 8,836.3 1,647.8 9,547.9 1,686.5 4,332.0 326.0 4,453.2 289.9 9,547.9 1,356.5 Total Expenditure 105,357.5 108,773.1 49,801.2 39,928.7 94,235.8 Total non-interest expenditure Non-financial public enterprise Wages and Salaries Goods and Services Local taxes The NIS Taxes to central government Dividends and transfers 99,488.7 89,393.4 20,541.2 68,436.9 415.3 9,142.3 828.0 125.0 102,596.7 91,100.5 21,213.5 69,605.9 281.1 10,383.3 957.9 155.0 47,054.4 42,402.6 9,934.0 32,274.7 193.9 4,212.6
 439.2 0.0 37,383.4 32,455.7 8,401.4 23,963.4 90.9 4,320.4 607.3 0.0 85,260.3 73,740.3 18,848.3 54,633.9 258.1 10,382.8 982.2 155.0 Primary surplus or deficit (-) 2,330.3 8,104.7 (981.5) 1,824.3 9,781.2 Interest External Internal 428.1 149.5 278.6 595.9 245.8 350.1 136.5 38.6 97.9 140.3 24.6 115.7 820.2 584.9 235.3 Current surplus or deficit (-) 1,902.2 7,508.8 (1,118.0) 1,684.0 8,961.0 Capital Expenditure Enterprises NIS Less Government transfers Overall surplus or deficit before special transfers (-)
 5,440.7 5,397.6 43.1 5,580.5 5,391.0 189.5 2,610.3 2,604.5 5.8 2,405.0 2,381.1 23.9 8,155.3 7,965.8 189.5 (3,538.5) 1,928.3 (3,728.3) (721.0) 805.7 Special Transfers (29.0) 0.0 (29.0) 0.0 0.0 Overall surplus or deficit after special transfers (3,567.5) 1,928.3 (3,757.3) (721.0) 805.7 Financing External Domestic Divestment Proceeds 3,567.5 1,478.5 1,887.4 201.6 (1,928.3) (205.4) (1,722.9) 0.0 3,757.3 3,054.0 703.3 0.0 721.0 4,596.1 (3,875.1) 0.0 (805.7) 1,557.6 (2,393.8) 30.5 Figures: G $m Mid-Year Report 2009 Source: Ministry of Finance 32 Public Enterprise Cashflow APPENDIX E4 MID-YEAR CENTRAL GOVERNMENT ABSTRACT OF NON-INTEREST CURRENT EXPENDITURE BY CHART OF ACCOUNT Acct Cod Chart of Account 602 Total Statutory Expenditure 601 6011 6012 6013 Total Statutory Employment Expenditure Statutory Wages and Salaries Statutory Benefits and Allowances Statutory Pensions and Gratuities Statutory Payment to Dependants Pension Funds Statutory Payments to Dependants Pension Funds Other Direct Labour Costs Incentives Benefits and Allowances National Insurance Pensions Revision of Wages and Salaries Revision of Wages and Salaries 6021 Total Appropriation Expenditure 601 Total Employment Costs 611 Total Wages and Salaries Administrative 6111 Senior Technical 6112 Other Technical and Craft Skilled 6113 Clerical and Office Support 6114 Semi-Skilled Operatives and Unskilled 6115 Contracted Employees 6116 Temporary Employees 6117 613 Overhead Expenditure 6131 6132 6133 6134 6135
 614 6141 620 Total Other Charges 621 6211 622 6221 6222 6223 6224 623 Fuel and Lubricants Fuel and Lubricants 6231 Rental and Maintenance of Buildings 624 6241 Rental of Buildings 6242 Maintenance of Buildings 6243 625 6251 Maintenance of Roads 6252 Maintenance of Bridges 6253 Maintenance of Drainage and Irrigation Works 6254 Maintenance of Sea and River Defenses 6255 Maintenance of Other Infrastructure Expenses Specific to the Agency Expenses Specific to the Agency Materials, Equipment and Supplies Drugs
 and Medical Supplies Field Materials and Supplies Office Materials and Supplies Print and Non-Print Materials Janitorial and Cleaning Supplies Maintenance of Infrastructure 2008 Actual 2009 Budget H1 2008 H1 2009 2009 Revised 2,392,558,000 2,360,258,000 445,977,000 175,870,000 1,738,411,000 2,513,404,000 2,478,804,000 466,764,000 183,294,000 1,828,746,000 1,084,337,488 1,084,337,488 215,217,763 79,428,598 789,691,127 1,283,117,975 1,283,117,975 221,974,716 72,130,795 989,012,464 2,531,007,315 2,496,407,315 470,547,350 197,113,965 1,828,746,000 32,300,000 34,600,000 - - 1,333,704,000
261,643,229
Mid-Year Report 2009 Figures: G $ Central Government Abstract of Non-Interest Source: Ministry of Finance 33 Current Expenditure by Chart of Account APPENDIX E4 __________________________________________________________________________________________________________________________________ MID-YEAR CENTRAL GOVERNMENT ABSTRACT OF NON-INTEREST CURRENT EXPENDITURE BY CHART OF ACCOUNT Acct Cod Chart of Account
 2008 Actual 2009 Budget H1 2008 H1 2009 2009 Revised Utility Charges Telephone Charges Electricity Charges Transport, Travel & postage 626 6261 Local Travel and Subsistence 6262 Overseas Conferences and Official Visits Postage, Telex and Cablegrams 6263 6264 Vehicle Spares and Service 6265 Other Transport, Travel and Postage 627 6271 6272 6273 Water Charges 628 6281 6282 6283 6284 Other 629 6291 6292 6293 6294 Other 630 6301 6302 Other Goods and Services Purchases Security Services Equipment Maintenance
 Cleaning and Extermination Services Other Operational Expenses National and Other Events Dietary Refreshment and Meals 631 6311 6312 632 6321 Education Subvention and Training Education Subventions and Grants Training (Including Scholarships) Rates and Taxes and Subventions to Local Authorities Rates and Taxes Subventions to Local Authorities Subsidies and Contributions to Local & Int Org Subsidies and Contributions to Local Organisations Subsidies and Contributions to International Organisations Refunds of Revenue Refunds of Revenue Pensions Non-Pensionable Employees Pension Increases 6322 633 6331 634 6341 6342 6343 Old Age Pensions and Social Assistance Other Public Debt 635 6351 Other Public Debt Grand Total 8,249,000
9,422,827,000 741,268,000 8,249,000 8,249,000 5,040,803,000 139,564,000 1,352,327,000 3,548,912,000 - 839,088,000 8,200,000 8,200,000 5,643,554,000 164,800,000 1,447,600,000 4,031,154,000 - 2,592,188
4,438,524,692 416,433,370 2,592,188 2,592,188 2,112,741,609 37,426,505 543,262,414 1,532,052,690 - - - 72,002,276,000 74,494,600,000 30,998,576,572 30,922,811,266 74,828,667,316 Mid-Year Report 2009 Figures: G $ Central Government Abstract of Non-Interest Source: Ministry of Finance 34 Current Expenditure by Chart of Account APPENDIX E5 MID-YEAR CENTRAL GOVERNMENT ABSTRACT OF REVENUE BY HEAD ITEM 2008 ACTUAL 2009 BUDGET 2008 H1 2009 H1 2009 REVISED TOTAL REVENUE 116,466,739 130,745,639 58,187,182 55,815,681 126,633,965 TOTAL CURRENT RECEIPTS 82,947,789 90,285,100 42,286,825 48,417,370 91,853,832 CURRENT RECEIPTS TAXES I II II IV V CUSTOMS AND TRADE
 TAXES 7,484,352 7,758,807 3,116,736 3,405,584 7,799,500 VALUE ADDED AND EXCISE TAXES 37,101,714 41,266,555 17,758,339 21,305,165 42,699,581 INTERNAL REVENUE 34,547,746 37,361,975 19,025,151 20,204,206 36,164,806 STAMP DUTIES 25,133 355,131 12,540 149,028 OTHER TAX REVENUE 798,145 280,020 117,933 148,155 299,130 285,035 FEES, FINES, ETC.
XI FINES, FEES.

ETC.

814,803 827,110 413,904 448,635 888,307 REVENUE FROM PROPERTY AND ENTERPRISE XII INTEREST XIII RENTS, ROYALTIES, ETC.
XIV LAND DEVELOPMENT SCHEMES 16,676 6,818 2,550 8,350 15,348 2,479 1,137 5,119 2,550 10,010 XV DIVIDENDS AND TRANSFERS 1,470,753 1,955,000 1,345,753 2,506,361 3,276,361 MISCELLANEOUS RECEIPTS ` MISCELLANEOUS RECEIPTS XVI 681,649 469,602 478,642 243,982 428,552 TOTAL CAPITAL RECEIPTS 33,518,950 40,460,539 15,900,357 7,398,311 34,780,133 CAPITAL RECEIPTS XXI MISCELLANEOUS CAPITAL REVENUE 2,820,618 1,643,874 1,199,377 947,141 2,167,182 XXII EXTERNAL GRANTS 13,611,630 16,080,100 8,685,371 1,902,545 12,478,133 XXIV EXTERNAL LOANS 17,086,702 22,736,565 6,015,609 4,548,625 20,134,818 Mid-Year Report 2009 Figures: G $ ‘000 Central Government Source: Ministry of Finance 35 Abstract of Revenue by Head APPENDIX E6 MID YEAR CENTRAL GOVERNMENT SUMMARY OF CAPITAL EXPENDITURE BY SECTOR AND TYPE OF FINANCING 1.0 3.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 SECTOR AND SOURCE Agriculture 1.1 Specific 1.2 Non- Specific Fishing 3.1 Specific Non- Specific Power Generation 5.1 Specific 5.2 Non - Specific Manufacturing 6.1 Specific 6.2 Non- Specific Construction 7.1 Specific 7.2 Non- Specific Transport & Communication 8.1 Specific 8.2 Non- Specific Housing 9.1 Specific 9.2 Non- Specific Environmental and Pure Water 10.1 Specific 10.2 Non- Specific Education 11.1 Specific 11.2 Non- Specific Health 12.1 Specific 12.2 Non- Specific Culture/Youth 13.1 Specific 13.2 Non -Specific National Security and Defence 14.1 Specific 14.2 Non -Specific 2008 2009 ACTUAL BUDGET 2,769.642 201.481 2,568.161 7,548.993 5,000.000 2,548.993 13.361 0.000
2,206.065
3,173.703 1,610.000 1,563.703 2,973.565 2,206.065 767.500 363.745 0.000 363.745 532.000 0.000 532.000 2008 H1 2009 H1 Mid-Year Report 2009 Figures: G $ m Summary of Capital Expenditure Source: Ministry of Finance 36 by Sector and Type of Financing APPENDIX E6 MID YEAR CENTRAL GOVERNMENT SUMMARY OF CAPITAL EXPENDITURE BY SECTOR AND TYPE OF FINANCING SECTOR AND SOURCE ACTUAL 2009 BUDGET 2008 2008 H1 2009 H1 15.0 Public Safety 15.1 Specific 15.2 Non -Specific 861.581 162.257 699.324 2,147.869 1,063.000 1,084.869 192.113 70.811 121.302 699.101 334.380 364.721 16.0 Tourist Development 16.1 Specific 16.2 Non -Specific 4.065 6.000 2.440 - 4.065 - 6.000 - 2.440 - - - 17.0 Administration 17.1 Specific 17.2 Non -Specific 2,609.936 1,595.538 1,014.398 2,241.031 945.000 1,296.031 651.688 441.954 209.734 278.432 114.342 164.090 18.0 Financial Transfers 18.1 Specific 18.2 Non -Specific 1,708.977 1,260.000 448.977 2,283.340 585.000 1,698.340 472.269 378.000 94.269 1,053.359
 607.000 446.359 19.0 Social Welfare 19.1 Specific 19.2 Non -Specific 1,444.274 568.718 875.556 1,914.190 950.000 964.190 440.548 283.398 157.150 431.458 170.287 261.171 20.0 Overall Total 20.1 Specific 20.2 Non -Specific 36,389.634 20,995.493 15,394.141 46,502.565 27,167.565 19,335.000 12,525.620 8,305.185 4,220.435 11,204.956 6,451.168 4,753.788 Mid-Year Report 2009 Figures: G $ m Summary of Capital Expenditure Source: Ministry of Finance 37 by Sector and Type of Financing APPENDIX F1
 __________________________________________________________________________________________________________________________ MID-YEAR EXTERNAL DEBT STOCK SUMMARY ITEM 2008 ACTUAL 2009 BUDGET 2008 H1 2009 H1 2009 REVISED TOTAL EXTERNAL DEBT 834.322 939.830 773.777 861.502 939.830 1.0 Multilateral IBRD IDA IADB CDB CMCF IMF Others 1/ 2.0 Bilateral 2.1 Paris Club Creditors: USA -PL 480 UK Canada Germany -KFW Netherlands Denmark Norway Sweden France Japan T&T Russia Italy Others 2/ 2.2 Non-Paris Club Creditors: Venezuela Argentina Kuwait Libya Cuba Bulgaria Others 3/ 3.0 Private Creditors 3.1 Suppliers 4/ 3.2 Financial Markets/Bonds 5/ 9.65
Notes: 1/ Includes EEC, EIB, IFAD,OPEC and IFC Loans.
2/ Includes CDC Loans.

3/ Includes DPRK, Brazil, China, UAE, India and Yugoslavia Loans.

4/ Includes ITT, Caterpillar Americas, Nissho Iwai/Komatsu, Boskalis, GPL (Banco de Credito, Panama) and EPDS debts.

5/ Includes Booker plc, Bonds, Bank of Nova Scotia, Lloyds Bank, GPL (NBIC/RBTT Debenture) and Barclays Bank debts.
Figures: US $m Mid-Year Report 2009 Source: Ministry of Finance 38 External Debt Stock Summary APPENDIX G1 MID-YEAR EXPENDITURE OF KEY SECTORS 2008 ACTUAL 2009 BUDGET 2008 HI 2009 HI Education 18,458,913,064 20,473,546,000 8,164,057,880 8,163,874,578 Health 11,043,928,908 12,788,265,000 4,864,504,390 6,249,365,000 Agriculture 6,465,056,863 10,995,617,850 2,115,901,091 2,412,292,459 Infrastructure 11,062,692,000 12,849,865,000 2,787,020,607 2,825,879,117 Housing and Water 3,873,577,553 5,011,510,000 1,427,622,449 1,850,531,637 GRAND TOTAL 50,904,168,388 62,118,803,850 19,359,106,417 21,502,637,791 Figures: G $m Source: Ministry of Finance Mid-Year Report 2009 39 Expenditure of Key Sectors