Guyana’s economy remains resilient– IMF

…Real Gross Domestic Product (GDP) projected to grow by four per cent this year

International Monetary Fund (IMF) Mission Chief for Guyana Therese Turner-Jones said Guyana’s Real Gross Domestic Product (GDP) is projected to grow by about four per cent this year, supported by increased activity in bauxite, gold, rice and the services sectors, which should offset any expected fall off in sugar production.

Turner-Jones made the announcement following a visit to Guyana on July 17-27 to conduct the fund’s yearly review of the Guyanese economy.
“Despite a deteriorating external environment, including the deepening eurozone crisis, Guyana’s economy continues to be resilient. In 2011, the economy recorded another year of impressive growth of more than five per cent driven in part by high commodity prices, foreign direct investment, and domestic credit expansion to the private sector.”
Turner-Jones said while inflation remained low, a marginal drop in gross foreign reserves to about four months of imports at end-June 2012 was noted, as capital imports rose. She commended Guyana for its continued prudent macroeconomic management.
“Going forward, infrastructure projects led by construction of the hydro power plant at Amaila Falls (AFHP) along with private mining investments should sustain growth levels at around five per cent.”
“Discussions with authorities centred on how to maintain fiscal and debt sustainability while reducing poverty through continued inclusive growth in the context of the Low Carbon Development Strategy. With growth expected to remain robust over the medium-term, and given Guyana’s significant investment requirements, including in the AFHP project, policy buffers need to be strengthened,” she said.
The IMF official noted that fiscal consolidation should be intensified, including by reassessing the high level of energy subsidies and implementing more targeted social safety nets.
In addition, she encouraged Guyana to accelerate reform at the National Insurance Scheme (NIS), the Guyana Sugar Company (GuySuCo), and the Guyana Power and Light (GPL), and limit other potential contingent fiscal liabilities. She also welcomed progress on the Millennium Development Goals (MDGs), along with ongoing efforts by the authorities to build consensus around priorities for meeting Guyana’s social and developmental needs.