IMF forcasts 3.6% economic growth for Guyana

–based on projected performance of gold, budding oil sector

GUYANA has been on the positive side of economic growth over the past three years, and the International Monetary Fund (IMF) has projected a further 3.6 per cent growth of the economy in 2018.
The country was among the few which stood out for positive growth in the IMF’s Regional Economic Outlook update, themed “Latin America and the Caribbean: Stuck in Low Gear.”
Although there was a decline in the growth rate from 3.8 per cent in 2014 to 3.1 per cent in 2015, there seems to have been a rebound of sorts, with the rate moving from 3.3 per cent last year to a projected 3.5 per cent this year.
According to the IMF in its report, “The downturn in most economies is estimated to have extended into 2017, and positive growth is projected for 2018.
“Growth has been stronger in Guyana, supported by two new large gold mines and positive sentiment ahead of the beginning of oil production in 2020.”
On a more negative note, the local inflation rate is expected to move from 2.6 per cent this year to 2.7 per cent in 2018. Inflation is the rate at which the general level of prices for goods and services is rising, and as a consequence the purchasing power of currency is falling.

The IMF has, however, revealed that the economic prospect for the Caribbean is generally improving. The baseline projections reflect data available before the impact of Hurricanes Harvey, Irma, and Maria, which hit the Caribbean recently, and do not, therefore, reflect the devastating impact of these hurricanes on a number of countries in the region, and the risk they pose to their growth outlook, at least in the short-term.

ON TRACK
In its introductory statement, the organisation mentions that after disappointing growth over the past few years, economic activity in Latin America remains on track to recover gradually in 2017–18 as the global economy gathers steam, and recessions in a few countries in the region come to an end.
Long-term growth, however, remains weak, hampering income convergence towards advanced economy levels.
Fiscal space to support demand is reportedly limited, particularly for commodity exporters. But monetary policy can play a supportive role, because inflation has been moderating rapidly.
“More importantly, this is the time to urgently press ahead with much-needed structural reforms to ensure sustainable and inclusive growth. Priorities include closing infrastructure gaps, investing in human capital, encouraging female labor force participation, reducing labor market informality, enhancing governance and curbing corruption, and furthering trade and financial integration,” the report indicated.
With private investments being another driver of economic growth, the Government of Guyana’s intent is on promoting investment, innovation and crafting an institutional framework for economic development.

 

ENABLING ENVIRONMENT

President David Granger, during the opening ceremony of the recently concluded Business Summit, said that over the years, the government has been working to create a more enabling environment for business development by encouraging investments and ensuring a stable macroeconomic environment.
“Americans, Brazilians, British, Chinese, Indians, Russians are all investing here. Why can’t you? Why should Guyanese have to be reminded to invest in their own country?” President Granger said, adding that local investors have no earthly reason for not increasing investments which would fuel the expansion of the economy and provide employment.
One of the steps the government has taken to improve investments is to encourage the banking sector to expand its financial services to the agricultural, rural, hinterland, gold mining areas and other remote zones.
According to President Granger, that step is part of the government’s plan to allow investors to access affordable capital.
Investments alone will not yield the results they are looking for, he said, in that it has to be complemented by innovation to create a competitive economy.
The “Green State” Policy was seen as one of the things that created many opportunities for innovation because it emphasises the preservation of Guyana’s biodiversity; protection of the environment; the provision of eco-tourism and the promotion of renewable energy generation and practical measures to ensure climate adaption.
President Granger is of the belief that those factors opened business opportunities in the area of agriculture; banking; biodegradable packaging; construction; distribution services; eco-tourism; green transportation; Information and Communication Technology (ICT); the manufacturing of energy saving equipment and energy generation from sustainable sources.

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2 thoughts on “IMF forcasts 3.6% economic growth for Guyana”

  1. I am ecstatic to read President Granger’s comment about, “… the government’s plan to allow investors to access affordable capital.”

    He also added, “… that local investors have no earthly reason for not increasing investments which would fuel the expansion of the economy and provide employment.”

    President Granger, here is 1 important earthly reason. CRIME. When people are spending a ton of energy and money protecting their businesses from theft, both from internal and external forces it does put a damper on things. When a well known businessman like Saga can be killed that sends a message it’s open season.

    Here are other reasons, in addition to controlling the crime, eliminate the stifling bureaucracy and bribing to get things done and Guyana will see 8-10% annual growth. I wish you well.

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