– Finance Minister
– vigilance needed to protect domestic stability and growth
Despite tentative signs of recovery from the worst crisis in living memory, the global economy is still beset by uncertainty and risks, according to Finance Minister Dr. Ashni Singh, as he set out the challenging global economic context against which government’s policy framework for the next five years is cast, as outlined in the updated poverty reduction strategy.
The minister was at the time addressing the consultation on Saturday at the Guyana International Conference Centre, to consult with stakeholders on the poverty reduction strategy paper for 2011 to 2015.
In elaborating some of the major current sources of uncertainty in the global economy, Minister Singh highlighted ongoing challenges in the Eurozone, especially the fiscal challenges and sovereign debt crises faced by countries such as Greece, which recently had to be in receipt of a financing package in the form of a set of measures agreed to by political leaders of the Euro area during last week.
Minister Singh also highlighted the ongoing negotiations in the United States on the subject of that country’s sovereign debt ceiling, indicating that the outcome of those discussions would have important implications for the US economy and, in turn, important immediate and long term implications for the global economy.
Against this background, the Finance Minister emphasised the need for continued vigilance on the part of countries like Guyana to ensure that macroeconomic stability in their own domestic economies is protected, and to ensure that growth is secured, arguing that such stability is critical if continued progress is to be achieved in reducing poverty and improving social indicators.
The minister referred to Guyana’s macroeconomic performance in recent years, where, despite the prevailing global economic crisis, the Guyanese economy continued to achieve uninterrupted positive growth since the floods of 2005; external reserves have increased significantly, commercial bank deposits and credit to the private sector have also increased, the exchange rate has remained stable, and the fiscal deficit has declined steadily.
The minister pointed to these developments as continued vindication of the disciplined policy stance maintained by the current administration, and added that these achievements also provide clear evidence of the private and household sectors responding positively to the favourable environment created by government’s efforts.
Minister Singh highlighted increased saving and investment by households, as evidenced in accumulation of both monetary savings and fixed assets, including the significant growth in home ownership at the household level, along with increased investment by corporate entities in several productive sectors and in expanding productive capacity as evidence of long term confidence in the Guyanese economy. (GINA)