AFC accuses IMF of producing half-baked assessment of Guyana’s economy

Sep 19, 2023 News

…says bank ignored opposition, citizens’ views

Kaieteur News – Leader of the Alliance for Change (AFC), Khemraj Ramjattan has accused the International Monetary Fund (IMF) of presenting a half-baked assessment of Guyana’s economy in its Concluding Statement of the 2023 Article IV Mission.

Leader of the Alliance for Change (AFC), Khemraj Ramjattan

Speaking at a press conference on Thursday, Ramjattan said that while the statement paints a mostly glowing picture of Guyana’s economic circumstances, the reality is nowhere near the truth for many ordinary citizens.

Ramjattan, whose party represents half of the combined opposition, accused the IMF of excluding the input of members of the opposition as well as ordinary citizens in its recent exercise on the Concluding Statement of the 2023 Article IV Mission on Guyana.

“The Article IV Mission Statement is supposed to have inputs from the representatives of the Opposition. Against all protocol this 2023 statement does not reflect a consultation with the Opposition…  I believe it would be interesting to hear who were the actual invitees that were consulted during the period of August 28 to September 11, 2023, and what was discussed by these invitees,” Ramjattan said.

The AFC Leader said too that it appears too that on the broader spectrum that the ordinary Guyanese were kept out of the process.

He noted that “The AFC is all too aware that there will eventually be rapid growth in Guyana as a result of the signing of the 2016 Production Sharing Agreement (PSA) which was signed by the A Partnership for National Unity +Alliance For Change Government which was harshly criticized by the then People’s Progressive Party Civic Opposition….”

He continued: “However the huge growth in statistical terms is hardly reaching the ordinary Guyanese; only an elite few seem to be the beneficiaries. Guyanese in all regions find life most miserable these days. Aggravated by obviously, the dashed expectations as to what the oil sector would bring to them.”

He noted that the number of citizens flooding the passport offices and U.S. Embassy are evidence of the harsh realities faced by the population.

“The passport offices are filled every day with applicants and the U.S. Embassy has long lines of a vexed population that exists in many homes. Yet the PPP government has been using that statement as propaganda saying it has placed Guyana in the forefront…” Ramjattan stated.

According to the IMF, a staff team from the International Monetary Fund (IMF), led by Ms. Alina Carare, held discussions during August 28 – September 11 for the 2023 Article IV Consultation.

The IMF said the team met with Vice-President Bharrat Jagdeo, Finance Minister Dr. Ashni Singh, Minister of Parliamentary Affairs and Governance Gail Teixeira, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, banks, labor unions, and other stakeholders.

Based on its consultation, the IMF reported that the Guyanese economy continues to grow very rapidly, supported by the government’s modernization plans, including the unparalleled oil sector expansion.

The team noted that following record real GDP growth in 2022—62.3 percent, the highest in the world—real GDP is expected to continue to grow extremely fast in 2023 (38 percent).

The international body noted that “Oil production is ramping up with the coming on stream of a third oil field, and growth in the non-oil sector is supported by the implementation of a fast-paced public investment program focused on providing transportation, housing, and flood management infrastructure, and raising human capital. Spillovers from oil and construction are supporting growth in the services and supplies sectors, while agriculture, mining and quarrying are also performing well.”

“After a strong 2022, in the first half of 2023 real non-oil GDP grew by 12.3 percent. CPI inflation reached 7.2 percent at end-2022, in line with other countries in the region, and declined to 1.2 percent on a y/y basis in July 2023, with the decline in transportation and communication prices. The external current account swung into a large surplus in 2022, of 23.8 percent of GDP, and another large surplus is expected in 2023. Banks are well capitalized and liquid,” the statement added.

Additionally, the consultation exercise pointed to sustained real non-oil GDP growth of 5.5 percent is projected, as the government continues its ambitious plans to address developmental needs.

“Guyana’s favorable medium-term growth prospects are accompanied by upside and downside risks. On the upside, further oil discoveries would continue to improve growth prospects,” the statement pointed out adding that construction growth and strong public investment may support higher than expected short-term non-oil growth but could also lead to inflationary pressures and the appreciation of the real exchange rate beyond the level implied by a balanced expansion of the economy, overheating, and the crowding out of credit to the private sector.

• Central Bank Governor Gobind Ganga, Finance Minister Dr. Ashni Singh, Khemraj Ramjattan, Leader of the Alliance For Change (AFC), Minister of Parliamentary Affairs and Governance Gail Teixeira, Vice President Bharrat Jagdeo