Guyana Successfully Keeping Prices Down By Using Oil Revenue For Subsidies

  • The government of Guyana explained that it has been able to take measures to cushion the cost of living and increase the price of basic foodstuffs for the population. In a live broadcast, the president reminded the nation that the rise in global food prices and the costs of transportation, goods, and services resulted from the Russian-Ukraine war and the global pandemic, among other disruptions.
  • In the European Union, food price inflation increased from the last quarter of 2021 to reach 7.5% in May 2022. In Latin America and the Caribbean, food price inflation surged by 81.6% between January 2022 to September 2023.
  • However, the low food inflation rate in Guyana is due to deliberate investments and measures implemented by the government to boost food production by providing the necessary support to the poultry sector and farmers. This is achieved through the deliberate interventions of the government and the policies and programs in the budget that are buttressing the economy and creating an environment that leads to stability.
  • The government implemented a slew of measures to further reduce food inflation, such as the removal of value added tax (VAT) on fertilisers, agrochemicals, pesticides and several inputs in the poultry industry, at an annual estimated cost of $262 Mn.
  • Further, to boost food production, the government removed VAT on machinery, corporate income tax, reversed drainage and irrigation (D&I) fees, constructed shade houses, farm to market roads and D&I infrastructures.
  • The government reinstated the ‘Because We Care’ cash grant, placing over $22Bn into the hands of parents over the last four years, to supplement the income of many households. Old age pension and public assistance were increased by more than 75% and 111.1%, respectively. The undertaking provided over $13.4Bn and $2.8Bn into the hands of these beneficiaries, respectively.
  • Before the end of 2024, President Ali has pledged to highlight more strategies that will increase disposable income at the household level and expand prosperity.

(Source: St. Kitts and Nevis Observer)