…global activity projected to contract by 1.3%
(GINA) The April 2009 World Economic Outlook (WEO) which presents the International Monetary Fund (IMF) staff’s analysis and projections of economic developments has projected that Guyana’s economy will grow by 2.604% in 2009, and by 3.448% in 2010.
In contrast, “even with determined steps to return the financial sector to health and continued use of macroeconomic policy levers to support aggregate demand, global activity is projected to contract by 1.3% in 2009,” the report stated.
“Moreover, the downturn is truly global: output per capita is projected to decline in countries representing three-quarters of the global economy. Growth is projected to re-emerge in 2010, but at 1.9 percent it would be sluggish”, the report continued.
The report also projects that the economies of Latin American and Caribbean countries will shrink by 1.5% as a result of the financial turbulence, slumping demand from advanced economies, especially the United States which is the largest trading partner for the region, and the resulting fall in commodity prices.
Guyana’s inflation rate for 2009 will be a modest 3.639%, and 4.975% in 2010, the IMF has projected.
With the global economic crisis continuing to have a severe impact on trade flows, many countries have found it difficult to establish credible economic targets and have frequently had to revised targets set.
Speaking on the report yesterday at Parliament building, Minister of Finance Dr. Ashni Singh stated, “The projections contained in the outlook suggest that within the halls of those who do these sort of projections, there is the view that Guyana will continue to grow this year, albeit somewhat more modestly than we have been growing in recent years.”
Guyana economy achieved real growth of 3.1 percent in 2008, following growth rates of 5.1 and 5.4 percent in 2006 and 2007 respectively.
“We have noted that this current issue of the regional economic outlook does suggest that while the Western Hemisphere, and in particular Latin America and the Caribbean, have been significantly affected by the current global economic crisis, the analysis does suggest that there is evidence that domestic policy in some countries within the region will help these countries rebound from the crisis, and in some cases, to rebound a little bit earlier than has been anticipated,” Minister Singh stated.
“We believe that our domestic policy has provided us with some amount of cushion, but our economy will inevitably face the consequences of what is going on globally. We remain, as a government, firmly committed to preserving and maintaining an appropriate policy environment that will lend itself to a minimizing of the effects that might emerge from the external environment.”
Government has continually focused, over the years, on maintaining macro-economic stability, and to reduce the effect that external volatility may have on the economy, has stressed the diversification of the economy away from the traditional sectors of sugar, rice and bauxite.
The $128.9B 2009 National Budget, which was approved by the National Assembly on February 26 has projected that Guyana’s economy will grow by 4.7% in 2009 with inflation targeted at 5.2%.
