After five consecutive years of positive growth of our economy, averaging over 5% during that period, the World Bank has predicted another year of growth of 5.1% for this year, and 5.6% for next year.
Interestingly, our predicted growth rate of 5.1% is the third highest in Latin America and the Caribbean, with Haiti projected to have a growth rate of 8.1 % and Panama 6.1%.
So the trend of a positive growth rate for our economy would continue based on the World Bank predictions and this is a clear signal that it is being properly managed and all credit must go to those who are responsible for the management of our economy.
This also dispelled the notion being peddled by some that our economy is being mismanaged.
It is most irresponsible and downright barefaced to peddle such untruth when the facts clearly show that for five consecutive years there have been positive growth of the Guyanese economy and, for a sixth year, there has been projection of another impressive growth by no other than the World Bank.
But that is reality we have to deal with in Guyana. There are some who simply love to distort facts to satisfy their narrow and partisan political agenda.
What is even more commendable is the fact the continuous achievement of a positive growth is happening in a period of widespread global financial turmoil where much more powerful economies are in great financial trouble and in recession.
The World Bank has warned of the continued threat of a global financial shock “similar in magnitude to the Lehman crisis,” because of the possibility that a major European economy could be shut out of the global debt markets.
In that case, the bank estimated the damage to the world’s economic growth would rival the recession of 2008 and 2009.
“The largest economy in the world is weakening,” Justin Yifu Lin, the bank’s chief economist, said, referring to the European Union. “The message for developing countries is to start preparing now.”
The Bank further cautioned that a worst case in Europe could lead to significant hardship for emerging economies. Commodity prices could fall as much as 24 %, hurting government revenue in export-dependent nations. Global trade volumes could fall by more than 7 %. Countries in Central Asia and Eastern Europe would be hit hardest, the bank said.
But even if catastrophe does not occur, growth looks weaker, the bank said. For instance, the World Bank estimates world trade will expand only 4.7 % in 2012, down from 12.4 % in 2010.
Thanks and kudos to the managers of our economy, who saw what was forthcoming, and took steps early to ensure that our economy did not end in a tailspin like what is happening elsewhere.
In fact, the World Bank and the International Monetary Fund has praised this country for its sound macroeconomic management and prudent economic policies.
This is what the Executive Directors said about Guyana in a 2007 report: “Directors commended the authorities for pursuing a prudent monetary policy. The authorities should remain focused on maintaining low inflation and guarding against potential pressures from the rapid increase in private sector credit.” The World Bank Directors also welcomed the efforts to further strengthen Guyana’s financial system—which remains fundamentally sound—by enhancing the supervisory framework and modernizing the reporting system.
They also noted that the central bank’s oversight of private lending may need to be strengthened to contain any possible weakening of bank assets accompanying rapid credit expansion.