…agriculture, mining sectors to rebound

THE Bank of Guyana (BoG) has projected that the local economy will grow by 4.4 per cent this year, due to growth in the major economic sectors.

The bank, in its fifty-fourth annual report, noted that the agriculture sector is expected to increase by 3.2 per cent, due to the increases in production of rice by 3.4 per cent, the output of sugar by 3.2 per cent and other crops by 4.0 per cent.

According to BoG, the mining and quarrying sector is forecast to expand by 3.4 per cent due to increases in the production of bauxite by 10.0 per cent and gold by 1.7 per cent.
In addition, the services industry is estimated to grow by 3.7 per cent on account of higher outturns of wholesale and retail trade by 5.0 per cent and transportation and storage activities by 3.5 per cent.

The construction and manufacturing industries are projected to increase by 10.5 per cent and 3.8 per cent respectively. Despite the many positive growth, the inflation rate is forecasted at 2.5 per cent because of moderate increases in food and fuel prices. The BoG’s Financial Stability Committee is, however continuously assessing a number of risk indicators pertinent to the financial and economic systems.

“The technicalities are mainly maneuvered through its financial stability frameworks to ceaselessly help build financial system resilience,” said the BoG. The bank had received support from the World Bank to the tune of US$6 million to modernise Guyana’s Payment System infrastructure. Part of the improvements entailed implementing a new Payments System Act with supporting regulations and modernisation of the Payment System infrastructure. The latter included the implementation of Real Time Gross Settlement (RTGS) and Central Securities Depository (CSD) systems.

The modernisation efforts from paper-based instruments to electronic payments will result in significant cost savings and efficiency improvements while reducing operational, credit, legal, liquidity investment and custody risks. As Guyana continues to grow despite the odds, global growth in 2019 is projected to decline to 3.5 per cent, partly because of the negative effects of tariff increases enacted in the US and China. Additionally, economic expansion in emerging markets and developing economies is expected to hold steadfast in 2019 at 4.5 per cent.

Latin America and the Caribbean are expecting growth of 2.0 per cent in 2019. The recovery in the region will be supported by improved demand from external trading partners and accommodative financial conditions on account of a less volatile international financial market and resilient capital inflows.

Meanwhile, Guyana’s economic growth rate was stronger at 4.1 per cent for 2018 when compared to the 2.1 per cent growth in 2017. This outturn was on account of higher production of bauxite, livestock, forestry and other crops as well as increases in construction, manufacturing and service activities. Favourable commodity prices, greater investment expenditure and moderate domestic demand were major factors influencing growth. However, the output of sugar, rice, gold and fishing declined, reflecting poor weather and road conditions as well as lower domestic demand from regulatory requirements.