The Urban Consumer Price Index for Georgetown increased by 1.4 per cent between December 2015 and December 2016.
This is according to the Monthly Economic Bulletin report prepared by the Economic Policy Analysis Unit (EPAU) of the Finance Ministry’s Office of the Budget which provides a monthly update on some of the important developments within Guyana’s economy.
The report said the major driver behind the inflation rate of 1.4 per cent for 2016 has been rising food prices, especially for fruits, vegetables, pulses and pulse products, and spices.
However, it noted that the prices for clothing and footwear and repairs declined by
Bank of Guyana Governor, Dr Gobind Ganga
3.1 and 2.4 per cent, respectively.
Bank of Guyana Governor, Dr Gobind Ganga told Guyana Times on Wednesday, however, that the inflation rate has been relatively stable over the past few months, despite concerns about the volatility in the foreign exchange market.
He disclosed that the inflation rate for January and February of 2017 was below one per cent.
“What is happening is that inflation is not growing fast…so inflation is under control. Many people would have pointed to inflation being higher because of the exchange rate that some people claim have depreciated,” he stated.
The report outlined that historically, inflation in Guyana has tracked inflation in the United States, so rising US inflation may put upward pressure on prices in Guyana, partly as a result of rising prices for US imports.
Dr Ganga said he did not have the figures for the inflation rates for the past two months, the period over which concerns about the foreign exchange market skyrocketed.
Several weeks ago, some city banks were charging G$230 for US$1. Many businesspersons and ordinary citizens have been complaining about being turned away by cambios and commercial banks over claims of foreign currency shortages.
This led to the exchange rate skyrocketing to an all-time high in a flourishing black market.
According to the Finance Ministry’s report, the official exchange rate for the month of December 2016 stood at G$206.50 for US$1.
Dr Ganga told this newspaper that the rate has not changed, as the Bank of Guyana was still buying foreign currency at that price.
Foreign reserves held by the Bank of Guyana fell by US$7.8 million in December to US$615.7 million. Reserve levels have been mostly stable since early 2015. For 2016, foreign exchange market interventions by the Bank of Guyana have been minimal.
For 2017, the interventions increased as the central bank issued a circular instructing cambios, in a move that has been deemed illegal, to apply a spread of $3 in their buying and selling of foreign currency.
Imports/exports
Meanwhile, there was a fall in imports by US$14.0 million to US$116.2 million in December 2016. December 2016 imports were 8.2 per cent lower than imports in December 2015.
The drop in imports in December was due to a 17.8 per cent decline in imports of capital goods, compared with November. Agricultural and mining machinery saw the greatest declines, with drops of 43.0 and 55.4 per cent respectively.
Domestic exports rose by US$9.6 million to US$149.7 million, a 6.8 per cent increase compared with November. December 2016 exports were 15.8 per cent higher than December 2015 exports.
Gold exports remained strong in December, increasing by US$13.2 million to US$99.8 million, when compared to November. The increase was largely a result of a US$9.8 million increase in exports by the Guyana Gold Board. December 2016 exports were 33.0 per cent higher than December 2015 exports.
Shrimp and prawn exports also did creditably in December, growing by 6.7 per cent compared to November. December 2016 exports increased by 84.1 per cent over December 2015.
