First quarter financial report
…as economy struggles to rebound from recessionary mode
By Samuel Sukhnandan
There is no positive indication that Guyana has so far managed to manoeuvre its way out of the economic slow lane it has been stuck in for the past three years, as the country’s finances are expected to reflect a minimal Gross Domestic Product (GDP) growth rate of approximately 2.1 per cent.
Initially, Government had projected that Guyana’s economy would have grown by a 3.8 per cent growth rate for 2017. This projection was reduced to 3.1 per cent and then again to 2.9 per cent.
According to the Finance Ministry’s Mid-Year Report for 2017, economic growth in the first half of 2017 rose to some 2.2 per cent, compared to 2.0 per cent in the first half of 2016.
Guyana’s last best growth rate was 5.2 per cent in 2013. But since then, it never
surpassed that figure. World Bank records show growth rates in 2014 was 3.8 per cent, 2015 at 3.2 per cent, and 2016 at 3.3 per cent.
This is a clear indication that there has been a massive decline in economic growth ever since the new Government assumed office. But the worst of it is 2017, and that is because of certain policy decisions.
A senior source at the Finance Ministry indicated to this newspaper that tabulation of the GDP growth rate for 2017 has been finalised and would be presented to the public soon.
This was confirmed by Public Relations Officer of the Finance Ministry, Wanita Huburn, who told <<<<Guyana Times>>>> that the growth rate for 2017, among other economic and financial indicators, has indeed been finalised and will be presented in short time.
Huburn indicated that this presentation will come in the form of the End of Year Outcome statement, which will be laid in Parliament on April 26.
But the a growth rate between 2.1 per and 2.4 per cent is nothing to boast about, according to the source, who highlighted that Guyana has seen a marked decreased in its growth rate, which continues to drop even further.
“Ideal growth for Guyana, a developing country, is six per cent. Anything six and above would be putting Guyana on the right path for advancement to develop status in the medium-term,” he explained.
The source said the growth rate now explains why many Guyanese will start to feel like they are having less money in their pockets. He observed that a five-year decline in the growth rate does not auger well for the current Government and shows the weak performance to manage the economy in a responsible and efficient manner.
Public policy action
“This calls for amended public policy action. The first thing they need to do is understand what stimulates the economy, which is investment in the productive sector and other investments, exports, bringing back confidence in the consumers, and having a stable spending and execution of capital projects,” he said.
According to the source, the main contributing factor for this minimal growth rate is ultimately sugar because it is fundamentally important ‘growth tissue’ for the country. “It is one of the main productive sectors and it’s the six sisters the President David Granger talks about,” he added.
While there is hope that this could turn around for the next few years, the source noted that it may be highly impossible to do so, especially given the fact that sugar’s contribution has decreased.
The source is of the opinion that until monies from the oil sector starts to trickle in, only then will Guyana be able to record greater economic growth. But until then, due to the massive downsizing of sugar and the weak performance of other sectors, achieving a higher growth rate is far from reality.
Opposition Leader and former President Bharrat Jagdeo has repeatedly criticised Government for what he described as their lack of vision to present a substantial economic policy. Jagdeo, an economist, has also warned Government against borrowing large loans which could put Guyana in greater debt.
