…as Govt already revised 2018 economic growth downwards
With Government already revising its 2018 growth projections downwards, the Parliamentary Opposition is expressing concern that the economy is hollowing out at an alarming rate.
Opposition Leader Bharrat Jagdeo, at a recent press briefing, zeroed in on the state of the economy, and noted that reports on Guyana’s economy tell a worrying story. One such story was told by the 2017 macro-economic report, which showed that the deficit in Guyana’s balance of payments is on the rise.
Balance of payments is statistical data on a country’s fiscal transactions, including imports and exports. To therefore record a deficit, Guyana would have had to spend more on imports, among other things, that it derived from exports.
According to the report, Guyana’s overall balance of payment in the 2017 fiscal year showed a deficit of US$69.5 million. This is a hike when compared to US$53.3 million recorded the previous year.
“All of these things are creeping up on us,” Jagdeo related. “They’ll hit us one day, and that’s when we’ll see the big deterioration in our dollar and our inflation rate. There is a hollowing out of the economy that we don’t see.
“We see the sloth in construction and retail trade, and the fall in forestry sector and sugar, but there is a hollowing out of our variables. These ratios…mean something: (that) the Government is living above its means, and is borrowing like crazy, spending on things that are not productive. And we’ll suffer the consequences,” he warned. According to Jagdeo, the Government has failed to implement incentives and formulate pro-poor, pro-growth policies. Jagdeo recalled a statement made by Prime Minister Moses Nagamootoo on his (Jagdeo’s) tenure as Finance Minister. At the time, Jordan was employed in the Finance Ministry.
“That (budget) is your framework, your budget. Everything else must support growth in the economy, job creation, and enhancing welfare for people. His (Finance Minister Winston Jordan’s) budgets seem designed to undermine growth.”
“So he (Jordan) misses the big picture. That’s why (Nagamootoo) said he (Jordan) used to write my speeches there…they have fetishes for long speeches…he never sat in the room where policy was determined. (They) have to understand the engines that drive the economy.”
Revised growth
At the recent 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank, held in Grenada, Minister Jordan announced that the previous 3.8 per cent growth projection he had announced at the last budget reading would be revised downwards.
“In spite of both domestic and external shocks, Guyana has maintained its positive growth trajectory; that has been evident for over a decade. In 2017, the economy recorded a growth rate of 2.1 per cent, reflecting improved performances in the forestry and rice sectors. On the other hand, contractions were witnessed in sugar and the construction and mining sectors,” Jordan had said.
“The outlook for 2018 is very positive, notwithstanding further declines in the sugar industry. Real growth is projected to be 3.4 per cent, slightly below the budgeted 3.8 per cent, with increased output in rice, construction, manufacturing and services sectors,” Minister Jordan said in his speech, calling this a robust performance.
Guyana’s last best growth rate was 5.2 per cent, recorded in 2013. World Bank records show Guyana’s growth rates as follows: in 2014, it was 3.8 per cent; in 2015, it was 3.2 per cent; and in 2016, it was 3.3 per cent. For 2017, initial projections of 3.8 per cent were revised to 3.1 per cent. This figure then went to 2.9 per cent before the final figure of 2.1 per cent was determined.
Jordan had claimed that the poor performance was linked to the dismal figures recorded in sectors, including sugar — a sector the Government itself had radically downsized when it came to office.
