By Kiana Wilburg
In spite of the economy’s below-par performance last year, the International Monetary Fund (IMF) is predicting that there will be a turnaround for 2018 with growth figures reaching as much as 3.4 percent.
The Fund made this known in its Concluding Statement which describes the preliminary findings of its official visit to Guyana this month.
The IMF said that economic growth slowed in 2017, but became more broad-based. It said that Real Gross Domestic Product grew by 2.1 percent, down from 3.4 percent in 2016. It said too that this was on the account of weaker than expected mining output and weak performance in the sugar sector.
Nonetheless, the Fund said that non-mining growth rebounded to 4.1 percent following a contraction in 2016. It said that construction expanded significantly, buoyed by higher public and private investments, while rice production recovered from weather-related shocks in the previous year. It also stated that inflation remained subdued at 1.5 percent at the end of 2017, largely driven by food items, while core inflation was close to zero.
In 2018, the mission projects real economic growth of 3.4 percent, driven by continued strength in the construction and rice sectors and a recovery in gold mining.
While it is still considered positive, a 2.1 percent growth rate for 2017 is the lowest Guyana has been in decades.
This figure and accompanying details were first released last month by Finance Minister, Winston Jordan, during a press conference.
His comments came on the heels of criticisms by the political opposition that it is almost four months into the New Year and the nation remains in the dark about the actual performance of the economy.
Setting the record straight on the matter, Jordan said the report on the economy has been prepared for some time now. He said it was perused by Cabinet and cleared for presentation to the National Assembly.
That said, the Finance Minister expressed, “The economy did not perform as robust as we expected it would last year. But even at the half year, we were predicting that the economy would not do well. At the end of the day, it turned out to be worse than we predicted. So even though there was positive growth for last year, it ended up being 2.1 percent.”
He continued, “Sugar we budgeted at 180,000 tonnes but it came in at 137, 307 tonnes. Rice did quite well. It was budgeted at 600,000 tonnes and came in at 630, 104 tonnes. Bauxite did not do well. We had budgeted 1, 726, 008 tonnes, but it came in at 1, 459,223. Gold was a major disappointment. It was budgeted at 694 ounces but came in at 653, 674 ounces. Forestry did reasonably well and …is showing signs of recovery. We budgeted 318, 00 cubic meters but came in at 349,900 cubic meters.”
The economist added, “So as you can see, there are very indifferent performances in the various sectors. I have been quite open with you about this economy, in that, it has not changed much in 50 years. It usually depends on one or two products… One day you are up when gold is up and then down when sugar, bauxite or rice is down.”
The Finance Minister also noted that the nation’s critical sectors have always depended on some “grandfather”, that is, a protectionary market. He said that this was the case with rice and the Venezuelan market where Guyana got premium prices for its produce. He noted that Guyana was able to benefit from the same market conditions for its rice in Trinidad and Tobago.
In terms of 2018, the Finance Minister said that the government looks forward to a better performance. In fact, he projected that there would be a 3.8 percent growth rate this year. The economist noted however that the sugar sector will continue to do poorly in the years to come.
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