THE Guyanese economy was hailed in an International Monetary Fund (IMF) country report for demonstrating resilience and recording a fifth consecutive year of robust growth for 2010, even in the face of external and domestic shocks.
The report, titled Guyana: 2010 Article IV Consultation – Staff Report, Supplement, Public Information Notice on the Executive Board Discussion and Statement by the Executive Director for Guyana, vindicates assertive comments President Bharrat Jagdeo has been making ever so often about the Guyanese economy growing from a Caribbean Council of Churches rating in the 1990s, as poorest in the Caribbean to one which is today the most progressive.
It stated that real output grew by an estimated 3½ percent in 2010, reflecting strength in the gold and services sectors.
The country’s monetary policy was described as moderately expansionary, including the stability of the currency against the US dollar, in the context of a steady increase in reserves.
The report which was completed on January 5 this year is based on bilateral discussions between a team of officials from the IMF and their Guyanese counterparts in November 2010, on economic developments and politics.
The visiting team, which included Chief of the IMF Mission to Guyana, Therese Turner-Jones, Garth P. Nicholls, Daniel Rodríguez-Delgado (all WHD), and Carlos Janada (FIN), Leslie-Ann Des Vignes, (OED, Senior Advisor) and Calvin Djiofack (World Bank) met President Jagdeo, Prime Minister Samuel Hinds, Minister of Finance Dr. Ashni Singh, Central Bank Governor Lawrence Williams, representatives of the private sector, labour, and the donor community, and members of the political opposition.
Discussions focused on a strategy for maintaining fiscal and debt sustainability over the medium term, and recommendations were made on maintaining a strong fiscal stance and addressing public enterprise weaknesses.
The country’s ongoing regulatory reforms in the fiscal sectors and Low Carbon Development Strategy (LCDS) were welcomed as an overall framework for transformation, but with advice to sustain vigilance in monitoring financial sector risks.
Mention was made about the ongoing reforms at the Guyana Revenue Authority (GRA), including streamlining the new functional organisation, further improvements in the integrated tax information system (TRIPS), profiling of tax payers and implementation of onsite inspections in the country’s ports of entry, and more intensive training of personnel.
In the financial sector, the passage of the Credit Bureau Act to improve lending conditions, and legislation to bring the New Building Society (NBS) under the supervision of the Bank of Guyana were acknowledged.
Its report on the LCDS made reference to the Guyana, Norway agreement of US$250 million payment pledged to Guyana, and a Multi-Stakeholder Steering Committee being formed to oversee the selection of investment projects.
On the downside, reports on the country’s sugar sector were unfavourable as reference was made to labour shortages and factory problems.
The public finances were reported to have weakened to some extent in 2010. Oil-related imports and changes in oil prices were major cause factors impacting the fiscal account in 2010, according to the report, which pointed to the reliance of the Guyana Power and Light (GPL) on fuel imports to generate electricity.
However, the government’s efforts to lower the excise tax on fuel to counteract the effect of oil price increases were acknowledged in the report.