Latest update June 14th, 2026 12:45 AM
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Glaring discrepancies
The economic projections in the January 2009 report on Guyana by the Economic Intelligence Unit are far different from those of the Finance Minister Dr Ashni Singh in his 2009 Budget.
According to the report, following estimated real Gross Domestic Product (GDP) growth of 4.6 per cent in 2008, the EIU expects economic growth to slow to 1.8 per cent in 2009 as external conditions worsen.
This is contrary to the three per cent growth predicted by Dr Singh and severely challenged during the 2009 Budget debate in the National Assembly. The forecast for 2010 did appear better in that the EIU expects a modest improvement, with GDP growth rising to 2.2 per cent. It also projected that gross fixed investment growth will slow to 2.3 per cent in 2009 as current building projects at the Skeldon sugar factory and the Berbice Bridge reach completion.
It was pointed out that other large investment projects, such as the Amaila Falls hydroelectric project and the proposed alumina plant at Linden, are unlikely to begin during the forecast period.
It noted also that an important source of growth will be exports and, although EIU expects export values to fall by over 30 per cent in 2009, the value of gold exports should remain high, while demand for rice and sugar which are Guyana’s two most important export crops would remain roughly stable.
Sugar output is expected to be buoyed by the completion of the Skeldon sugar factory. “However, GuySuCo (Guyana Sugar Corporation) will have to contend with a 12.5 per cent cut in the sugar price in euro terms, from US$727.
“This lower price will be in place until the termination of the sugar protocol in September 2009, after which there will be free access for increased quotas at an unspecified guaranteed price until September 2012,” according to a report by the Economic Intelligence Unit.
It noted also that flooding and other weather-related hazards remain an ongoing risk for agriculture, and indeed for mining and other economic sectors. The Economic Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For 60 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide.
The Economic Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations.
The firm is also a member of The Economist Group.
The Parliamentary Opposition has also been critical of the budget, pointing to what it sees as glaring inefficiencies and misrepresentations. But the government has hit back, accusing the Opposition of ignoring the basic facts.
However, the Economic Intelligence Unit seems to be in the corner of the political opposition, pointing to the anticipated shortfalls that the budget either ignores or fudges to look better than the reality.
Already, much is being made of the fact that taxes form the bulk of the budget when export earnings should have been the major revenue earner. Taxes will account for more that seventy per cent of the budget, fuelling the calls for a reduction in the value added tax, which the Opposition says is a burden.
The government, however, sees this tax as necessary since it allows for the improvement in the welfare of many Guyanese. This tax helps fund certain social services such as old age pensions, subsidy of the electricity and water sector, and cushioning the nation from some of the hostile prices on the world market.
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