http://guyanachronicle.com/201...y-grew-4-1-last-year
Economy grew 4.1% last year
…Minister Jordan
DESPITE the political fallout following the no confidence motion, Finance Minister, Winston Jordan said there has been no disruption to the economy which grew by 4.1% last year.
Describing the nation’s economic performance as “solid”, Minister Jordan said the sectors responsible for the “better than expected performance” were sugar, livestock, forestry, gold, diamonds and the wholesale and retail trades. The private sector has been saying that due to “uncertainties” economic activities have slowed. They however, have not produced actual data and method they used to arrive at the claims.
Last year’s growth came on the heels of a less than 3% GDP growth rate in 2017 and bettered the 3.4% growth which was initially projected in November of 2018. The latter was based on figures at hand and projections, explained the minister. He recalled some of the challenges of the previous year such as the reforms implemented to stop the “haemorrhaging” of the sugar sector. Those in the gold mining sector included ore quality, fluctuating international prices and poor quality access roads.
Minister Jordan noted that forestry, for example gained as the government had allocated funds to rehabilitate many hinterland access roads. This, he said, enabled the forestry sector to benefit. The sector also gained from the move to redistribute lands, formerly controlled by the BaiShanLin Company to smaller operators who seized the opportunity to utilise the tracts of forests.
Rebound of sugar
Moving forward, Minister Jordan stated that sectors such as sugar are expected to continue their stabilisation and rebound, along with bauxite. The latter, he said, should be on target despite recent labour disputes. The fact that the economy has expanded despite the “bleating of some naysayers”, the minister said, was a clear sign that the policies and measures being put in place are effective. He added that the economic performance, which has been praised by the Caribbean Development Bank for example, demonstrated that the Coalition Government was on the right track, even as it prepares for first oil in 2020.
According to the minister, growth is also spurred by the increased in “oil related activities”. He cited reports which indicate that financial and insurance activities, for example, are showing growth. He added that many are aware of the infrastructural building boom with many new buildings, such as apartments for example which are under construction. The fact that local beverage giants, Banks DIH and Demerara Distillers Limited are recording profits and expanding operations and even the profits reported by banks, are also telling signs, Minister Jordan stated.
The finance minister said that even the naysayers, and some of those trying to cast a pall over the economy, “are quietly investing behind the scenes.”
It is projected that the GDP’s growth rate will be 4.4% in 2019. The annual economic reports which have been produced since the government took office in 2015 will be done as is customary, the minister emphasised.
In a recent report the CDB said Guyana is on the verge of a sharp increase in economic growth this year but immediate prospects partly depend on ending political uncertainty. In a country brief the CDB alluded to Jordan’s November last budget speech where he projected 4.6% GDP growth in 2019, with all major sectors contributing. However, the Bank said increased political uncertainty in early 2019 may dampen this momentum. The uncertainty to which the bank refers is the Opposition no confidence motion, which was passed in the National Assembly on December 21, 2018.
The CDB also noted that preparation for oil production continues, noting that commercial production is due to commence in 2020. This, the bank said will increase economic growth and provide windfall revenues for the Government of the Co-operative Republic of Guyana.
The Bank said the proposed Natural Resources Fund (NRF) is supposed to help manage the risks associated with this new development, including minimising negative impacts on other non-oil industries. Reforms to the ‘doing business’.. environment are also necessary to ensure that non-oil industries can become more competitive. Other risks include political uncertainty.
Of the traditional main industries, sugar output fell by nearly 30%. However, the Bank noted that the government has commenced a restructuring programme of the Guyana Sugar Corporation (GuySuCo) being financed by a 5-year external bond issue for $30 billion. This restructuring includes reducing the workforce and divesting assets, in order to reduce subsidies.
