Worrying trend of economic woes highlighted – economist

Advisor to the Opposition on economic issues, Peter Ramsaroop, has said that following a scrutiny of Guyana’s mid-year report, he has concluded that there are worrying statistics which will lead to more economic woes for the country.
A look at the figures revealed that the overall balance of payments recorded a deficit of US.0 million in the first half of 2017; this compared to a surplus of US.1 million in the first half of 2016.
According to Finance Minister Winston Jordan, the unfavourable current account position was due to a higher trade deficit in merchandise and services, caused mainly by an increase in the value of imports.

This, according to Ramsaroop, is the Minister deciding that it was not his mismanagement of the domestic economy that caused this, but rather it was exogenous factors completely external to Guyana over which he had no control.
Ramsaroop added that Guyana has lost more on its export earnings than several years combined, with even gold beginning to free fall, losing in excess of $400 million for just the first half of the year, compared to the previous year.
The Public Sector Investment Programme (PSIP), which is financed by both local and foreign funded sources, expended $15.8 billion during the first half of 2017 and while this is a 19.8 per cent increase over the first half of 2016, it is in fact only 27.9 per cent of the PSIP’s budgeted allocation of $56.8 billion.
This means, Ramsaroop noted, that Government failed during its time in office to even spend its own budget to provide much needed services to the Guyanese people.
Jordan, he added, again blames delays in the project implementation as a result of a dearth of procurement planning, apparent lack of capacity, and delays in the tender process.
“But a look at the implementation of the foreign-funded projects also reveals a dire situation. Jordan blames everyone else and says these were plagued by delays emanating from the late finalisation of a number of financing agreements with both multilateral and bilateral development partners and the subsequent setting up of the project implementation unit.”
As such, a mere 29.6 per cent of the budgeted sum of $22.1 billion of the foreign-funded portfolio was expended.

Trends
A recent editorial carried by the unofficial Government’s mouthpiece openly now questions what it calls ‘worrying trends’ and points to the very report Jordan released.
It poignantly states the 2017 mid-year economic report is something of a mixed bag, in the sense that while revenue has increased by 13 per cent or $97 billion, and production in some sectors has increased, the decline in others would be cause for concern.
It concedes the overall growth in the economy in 2017 was led by the expansion in the rice and fishing industries. Indeed, it was a ballooning year for the rice industry whose growth increased by a whopping 31.6 per cent over production in the first half of 2016.
This was due mainly to favourable prices on the world market, strong demand, and entry into new markets, such as Mexico and Cuba.
But what else has been happening on the international front.
The foreign reserves appear to be drying up and this new Administration seems at this point in time incapable of brining any new investments or monies into the country, monies the country desperately needs.
The Government’s mouthpiece is now calling for the establishment of a Council of Economic Advisers to aid in the stimulation of growth in all the various sectors.
According to that editorial “The truth is the economy is limping at an anaemic two per cent growth rate due to the lack of foreign investment, which means that the economy has been starved of capital.”
A look at the report reveals, at the half year, total public debt amounted to US$1,637.7 million, representing an increase of 5.5 per cent compared to the 2016 half year position.
Of the total public debt, external debt amounted to US$1,200.7 million or 73.3 per cent, while domestic debt was US$437.0 million or 26.7 per cent, reflecting a marginal increase in both external and domestic debt.