…cites economic growth
Despite intense attack from the Opposition and the private sector that Guyana’s economy is deteriorating, Finance Minister Winston Jordan yesterday affirmed that the economy is good shape.
The Minister disregarded negative assertions of the state of the economy by presenting statistics and explanations in support of the government’s defence. Citing the International Monetary Fund (IMF) commendation of Guyana’s economic growth, Jordan stated that the economy grew by three per cent in 2015. It is further projected to grow by four per cent this year. This would mean a reversal of the economic situation in the country, last year.
“This clearly cannot be an economy that is on the decline or sluggish,” he stated.
He emphasized that the IMF report should not be doubted or challenged since it is already established that the body is neutral. IMF economists would visit a country and scrutinize its economic and financial developments before discussing policies within the two areas with the government and the central bank officials.
Noting that the government has not been idle in delivering since its occupancy in office, Jordan stated that they were engaging the attention of the Inter American Development Bank and the Caribbean Development Bank to acquire loans for the 2016/2017 period, particularly in areas of agricultural diversifications, infrastructural development and commerce.
Reviewing the activities of his government during its first year in office, he said that there have been salary increases in excess of five per cent, especially for people “at the bottom”, who benefited the most; the pension increased and VAT reductions on most items.
“Pensions were increased substantially…people who never bothered with their pension are now coming onto the roll. Rest assured they don’t scoff at it; they see it as something worth the while and we are hoping to improve it as the years go by as the economy allows for it,” he stated.
Jordan also stated that electricity tariffs, gasoline price and income tax threshold were all reduced to ensure that the consumers benefit. These three factors are all barriers to economic growth.
He said these incentives were granted when Guyana was experiencing troubles both internally and externally, when large sums of finances and other resources were poured into the ailing sugar industry, and the troubled rice industry.
“When we came in despite all the issues we faced, we were able to do a range of things and here I’m not knocking any newspapers but if all we can find in a one year review are three or four of the usual suspects giving their views then we would always believe that nothing is happening, those suspects see nothing happening anyhow,” he said.
“So it is not a doomsday scenario; we are doing reasonably well and we will continue to do well with good management of the economy, to prevent it from deteriorating,” he added.
Jordan further indicated that reduction in drug trade is somewhat liable for reduction in free spending. He noted that there were several studies carried out that revealed that an estimated 50 per cent of the economy was controlled by the informal sectors, including the drug trade and smuggling.
Bank of Guyana Governor, Dr. Gobind Ganga, agreed with Jordan’s declaration that there is progression in Guyana’s economy.
Dr. Ganga stated that though there is mixed performance for the first quarter of 2016, expansion is noticeable. He highlighted that there are improvements in the manufacturing sector while inflation is constrained.
“Our estimated growth is about .5 per cent deflation for the first quarter and we are seeing a net purchase of foreign exchange to the tune of just above US$25 million…That has resulted in a relatively unchanged exchanged rate,” he said.
The economy has seen significant movement on the current account, in terms of a move from a deficit from US$73.4 million to US$51.5Million. Meanwhile, the capital account has moved from a deficit of US$ 51.5 million to US$14.8million.
There is also an increase in the import cover from 4% of total goods and services to 4.7% while there is a marginal decline in external debts and an increase in domestic debts.
“All in all the financial system is quite healthy, sufficiently capitalized, some from the perspective of liquidity and also in terms of profitability. We have seen an economy with very sound macro-economic indicators and good confidence in the system to move forward,” he affirmed.
Opposition Leader Bharrat Jagdeo had criticised the government for what he believes is a drop in the economy. He had stated that Guyana was worse off since the APNU+AFC took office, lambasting the coalition for not putting forward a development plan for economic growth and crime reduction.
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