Buoyant gold, bauxite production to spur economy in 2012 - ECLAC
The United Nations Economic Commission for Latin America and the Caribbean ( ECLAC) has projected a growth rate of four per cent for Guyana next year, saying this will be driven mainly by buoyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops such as rice and sugar.
ECLAC said too that the ruling party’s reduced majority in Parliament could affect the growth in credit to the private sector, saying that the situation will create uncertainty as to whether the government will be able to maintain all aspects of its policy agenda. These observations are contained in ECLAC’s Preliminary Overview of the Economies of Latin America and the Caribbean 2011. However, in the report, ECLAC said the Guyanese economy continued to post robust growth in 2011, despite the continuing difficulties in the major export markets of the United States and Europe.
The estimate for 2011 is for overall growth of 4.8 per cent, while the forecast for 2012 is for an expansion of four per cent. According to ECLAC, policymakers in Guyana are expected to pursue the Low Carbon Development Strategy ( LCDS) in light of the victory of the ruling party at the polls in November, despite a much- reduced majority in Parliament. Under the agreement with the government of Norway for the joint implementation of this strategy, Guyana will receive some US$ 30 mil lion in financing in 2012 and up to US$ 100 million annually through 2020.
In 2011, ECLAC said the fiscal deficit will widen due to higher capital outlays.
The budget deficit is an ticipated to be 3.5 per cent of Gross Domestic Product ( GDP) in 2011, but may be as high as six per cent in 2012, due especially to the investment in the Amaila Falls hydroelectric project.
In the first half of 2011, some US$ 32.2 million in debt relief was received through the Multilateral Debt Relief Initiative; the International Monetary Fund ( IMF); the International Development Association; and the Inter- American Development Bank ( IDB). Debt servicing will be higher in 2012, and the debt- to- GDP ratio will also increase due to borrowing for investment purposes The monetary policy pursued by the Bank of Guyana in 2011 continued to focus on stabilising prices and ensuring suffi - cient liquidity in the bank ing system. In the first half of 2011, credit to the private sector continued to expand but at a slower rate relative to the corresponding period in 2010. Central government credit declined while private- sector credit grew by 6.7 per cent. In 2012, there will be moderate growth in credit to the private sector in view of the uncertainty as to whether the ruling party, with a reduced parliamentary majority, will be able to maintain all aspects of its policy agenda. The exchange rate was relatively stable in the first half of 2011 with a marginal devaluation of 0.25 Guyana dollars ( G$) to reach G$ 203.5 to the U. S. dollar. The foreign exchange market is expected to remain stable in 2012 since inflows of foreign exchange should be adequate.
In the first half of 2011, the economy posted growth of 5.9 per cent. In the second half, growth was less robust and the overall fig ure for 2011 will be around 4.8 per cent. Inflation for 2011 will approach the target rate of 4.8 per cent. For the first half of the year, it stood at 2.97 per cent, but should abate in the second half as food price inflation subsides. Employment in the public sector recorded a marginal decline of 0.89 per cent, which reflected a 1.67 per cent downturn in central government accounts.
Meanwhile, preliminary estimates for 2011 suggest an increase in private sector employment, especially in the areas of construction, and wholesale and retail trade. Employment is likely to pick up in 2012 with the start- up of a number of public sector capital projects.
In the first half of the year, the current account balance deteriorated by US$ 19.6 million. For 2011, the current account deficit will increase, reflecting ris ing prices for imports such as oil and commodities. As a result, reserves will decrease by US$ 36.1 million to 18 per cent of GDP. In 2012, with the construction of the large hydroelectricity project at Amaila Falls, the current account may widen significantly due to higher imports. This project, however, is likely to bring significant long- term energy savings and spur growth.
Source
The United Nations Economic Commission for Latin America and the Caribbean ( ECLAC) has projected a growth rate of four per cent for Guyana next year, saying this will be driven mainly by buoyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops such as rice and sugar.
ECLAC said too that the ruling party’s reduced majority in Parliament could affect the growth in credit to the private sector, saying that the situation will create uncertainty as to whether the government will be able to maintain all aspects of its policy agenda. These observations are contained in ECLAC’s Preliminary Overview of the Economies of Latin America and the Caribbean 2011. However, in the report, ECLAC said the Guyanese economy continued to post robust growth in 2011, despite the continuing difficulties in the major export markets of the United States and Europe.
The estimate for 2011 is for overall growth of 4.8 per cent, while the forecast for 2012 is for an expansion of four per cent. According to ECLAC, policymakers in Guyana are expected to pursue the Low Carbon Development Strategy ( LCDS) in light of the victory of the ruling party at the polls in November, despite a much- reduced majority in Parliament. Under the agreement with the government of Norway for the joint implementation of this strategy, Guyana will receive some US$ 30 mil lion in financing in 2012 and up to US$ 100 million annually through 2020.
In 2011, ECLAC said the fiscal deficit will widen due to higher capital outlays.
The budget deficit is an ticipated to be 3.5 per cent of Gross Domestic Product ( GDP) in 2011, but may be as high as six per cent in 2012, due especially to the investment in the Amaila Falls hydroelectric project.
In the first half of 2011, some US$ 32.2 million in debt relief was received through the Multilateral Debt Relief Initiative; the International Monetary Fund ( IMF); the International Development Association; and the Inter- American Development Bank ( IDB). Debt servicing will be higher in 2012, and the debt- to- GDP ratio will also increase due to borrowing for investment purposes The monetary policy pursued by the Bank of Guyana in 2011 continued to focus on stabilising prices and ensuring suffi - cient liquidity in the bank ing system. In the first half of 2011, credit to the private sector continued to expand but at a slower rate relative to the corresponding period in 2010. Central government credit declined while private- sector credit grew by 6.7 per cent. In 2012, there will be moderate growth in credit to the private sector in view of the uncertainty as to whether the ruling party, with a reduced parliamentary majority, will be able to maintain all aspects of its policy agenda. The exchange rate was relatively stable in the first half of 2011 with a marginal devaluation of 0.25 Guyana dollars ( G$) to reach G$ 203.5 to the U. S. dollar. The foreign exchange market is expected to remain stable in 2012 since inflows of foreign exchange should be adequate.
In the first half of 2011, the economy posted growth of 5.9 per cent. In the second half, growth was less robust and the overall fig ure for 2011 will be around 4.8 per cent. Inflation for 2011 will approach the target rate of 4.8 per cent. For the first half of the year, it stood at 2.97 per cent, but should abate in the second half as food price inflation subsides. Employment in the public sector recorded a marginal decline of 0.89 per cent, which reflected a 1.67 per cent downturn in central government accounts.
Meanwhile, preliminary estimates for 2011 suggest an increase in private sector employment, especially in the areas of construction, and wholesale and retail trade. Employment is likely to pick up in 2012 with the start- up of a number of public sector capital projects.
In the first half of the year, the current account balance deteriorated by US$ 19.6 million. For 2011, the current account deficit will increase, reflecting ris ing prices for imports such as oil and commodities. As a result, reserves will decrease by US$ 36.1 million to 18 per cent of GDP. In 2012, with the construction of the large hydroelectricity project at Amaila Falls, the current account may widen significantly due to higher imports. This project, however, is likely to bring significant long- term energy savings and spur growth.
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