Guyana is one of the world’s highly indebted countries, identified by the multilateral institutions for special treatment under the HIPC programme. In the last two years, two of the regional countries – Dominica and Grenada have needed external debt restructuring. A third, Belize – is in the process of debt restructuring.
High public debt hurts growth as resources that should be devoted to productive expenditure and social programmes are redirected to debt servicing. Moreover once high public debt sets in, it could be self-reinforcing on account of high debt servicing costs.