The World Bank has projected exports of goods from Guyana to decline significantly this year.The Bank’s Assistance Strategy for Guyana 2009-2012 states that this year, exports of goods are projected to decline (in value terms) by 16 percent, with a decline in all the main commodity exports, except gold, with exports of the precious metal projected to increase by 7.2 percent. According to the document, the commodity which is projected to experience the highest decline in exports, some 51 percent, is bauxite.

It was pointed out that Guyana is vulnerable to the global crisis, through this weakening of commodity exports, including sugar, rice, timber, and bauxite; and reduction in workers remittances and reduced foreign direct investment.

“Since exports of sugar, rice, timber, bauxite and gold account for 40 percent of GDP, the global slowdown in demand for these commodities is likely to have an impact on growth,” the strategy paper added.

In addition, it says, imports are also projected to decline by 19.2 percent in 2009, which will result in a projected increase in net merchandise trade from -484 to -365 from 2008 to 2009.

Remittances, which account for over 25 percent of GDP, are vulnerable to rising unemployment in labor markets in the U.S., Canada and the United Kingdom, it noted.

“Remittances have held up in 2008, but are projected to decline in 2009 by about -25%. Large investment projects under consideration, such as the hydropower plant, are likely to be delayed.”

The recent International Monetary Fund (IMF) article for Guyana which was released in February 2009 notes that as of the end of September 2008, the banks had capital to risk adjusted asset ratios well above eight percent and liquidity levels were comfortable.

According to World Bank projections, prospects in 2009 and 2010 show a slowdown in growth.

Also, growth in 2009 is projected to decelerate sharply in most non-sugar sectors. Sugar production, while projected to grow compared to 2008, does not achieve the increase of well over 20 percent projected in the 2009 budget.

“Starting in 2010, a more broad-based growth would be underpinned by an expected global economic recovery, which would result in gradual increases in export prices and remittances. Growth in Guyana could then reach well over three percent in 2010 and increase to four-five percent in 2011-2013,” the World Bank predicts.

In June, the World Bank Board of Directors approved the new Country Assistance Strategy (CAS) for Guyana, for the period 2009 and 2012, in support of the country’s development agenda in the areas of improving education, social safety nets and strengthening its ability to mitigate the effects of natural disasters and climate change.