Investors’ confidence in Guyana remain strong – IMF

TIMES INT'L

Guyana recorded another year of robust growth in 2011 supported by favourable external conditions, rising foreign direct investment and low inflation, the International Monetary Fund (IMF) has reported.
The IMF in its latest assessment of Guyana, noted that following the general elections in November 2011, the political situation, though largely stable, became more complicated, but investor interest has remained strong and confidence generally positive.
In 2011, output expanded by 5.4 per cent, buoyed by increased activity in the gold, agriculture and services sectors. Twelve-month inflation was at 3.3 per cent in 2011, reflecting pressures from higher food prices later in the year.
The current account deficit weakened somewhat (from 9.9 per cent of GDP in 2010 to 13.6 per cent in 2011) due to a surge in oil and capital goods imports as a result of higher international oil prices and stronger investment.
The IDB says that foreign  direct investments financed most of the current account deficit with gross reserves remaining comfortable in 2011 (though falling from 5.3 months of imports at the end of 2010 to 4.3 months of imports at the end of 2011). Public debt remained stable at 65 per cent of Gross Domestic Product (GDP).
In fiscal year 2011, the overall fiscal deficit widened to 4.4 per cent of GDP from 3.6 per cent of GDP in 2010, falling short of the target of 3.5 per cent of GDP. This slippage was due to the combined effect of an eight per cent wage increase to public sector workers in November 2011; lower excise fuel tax revenues used to cushion the impact of higher international oil prices; losses in public enterprises; and the increase in the tax threshold for personal income taxes.
IMF executive directors commended the authorities’ policies that have supported macroeconomic resilience and sustained growth.
Nonetheless, directors noted that policy challenges remain for the near and the medium term, and encouraged the authorities to persevere with fiscal consolidation and structural reforms to strengthen debt sustainability and make growth more inclusive.

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