For Guyana … ECLAC projects continuing robust economic growth, more employment
Written by Edward Layne
Friday, 23 December 2011 02:31
Source - Guyana Chronicle
THE Guyana economy maintained robust growth in 2011 despite the continuing difficulties in the major export markets of the United States (U.S.) and Europe.
This is according to an Economic Commission for Latin America and the Caribbean (ECLAC) report released earlier this week. It said the estimated overall growth for 2011 is 4.8 percent while the forecast for 2012 is for an expansion of 4 percent. The compilation said Guyana is expected to continue its pursuit of the Low Carbon Development Strategy (LCDS), in light of the victory of the ruling People's Progressive Party/Civic (PPP/C) at the November polls, despite a much reduced majority in Parliament.
“In the first half of 2011, the economy posted growth of 5.9 percent. In the second half, growth was less robust and the overall figure for 2011 will be around 4.8 percent. Growth of 4 percent is projected for 2012, driven mainly by bouyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops, such as rice and sugar." – ECLAC
"Under the agreement with the Government of Norway for the joint implementation of this strategy, Guyana will receive some US$30 million in financing in 2012 and up to US$100 million annually through 2020," ECLAC said.
It added that the fiscal deficit widened due to higher capital outlays, with the budget deficit standing at about 3.5 percent of Gross Domestic Product (GDP) and this will widen to 6 per cent in 2012, especially because of the investment in the Amaila Falls hydroelectric project.
ECLAC noted that, in the first half of 2011, some US$32.2 million in debt relief was received through the Multilateral Debt Relief Initiative, the International Monetary Fund (IMF), the International Development Association and the Inter-American Development Bank (IDB). Debt servicing will be higher in 2011 and the debt-to-GDP ratio will also rise through borrowing for investment purposes."
The compilation said "the monetary policy pursued by the Bank of Guyana in 2011 continued to focus on stabilising prices and ensuring sufficient liquidity in the banking system."
ECLAC said, in the first half of 2011, credit to the private sector continued to expand but at a slower rate, relative to the corresponding period in 2010.
UNCERTAINTY
"Central Government credit declined while private sector credit grew by 6.7 percent. In 2012, there will be moderate growth in credit to the private sector in view of the uncertainty as to whether the ruling party, with a reduced parliamentary majority, will be able to maintain all aspects of its policy agenda," ECLAC said.
The Commission said the exchange rate was relatively stable in the first half of 2011, with a marginal devaluation of 0.25 Guyana dollars (G$) 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."
About economic growth and inflation, ECLAC said: “In the first half of 2011, the economy posted growth of 5.9 percent. In the second half, growth was less robust and the overall figure for 2011 will be around 4.8 percent. Growth of 4 percent is projected for 2012, driven mainly by bouyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops, such as rice and sugar."
The Commission said inflation for 2011 will approach the target rate of 4.8 percent, because, for the first half of the year, it stood at 2.97 percent but should abate in the second half, as food prices inflation subsides.
Meanwhile, preliminary estimates for 2011 by ECLAC, suggest an increase in private sector employment, particularly in the areas of construction and wholesale and retail trade, with employment forecast to pick up further in 2012 through the start-up of a number of public sector capital projects.
The Commission said for the first half of this year, the current account balance deteriorated by US$19.6 million. "For 2011, the current account deficit will increase, reflecting rising prices for imports such as oil and commodities. As a result, reserves will decrease by US$ 36.1 million to 18 per cent of GDP. "
It concludes that, 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.
Last Updated ( Friday, 23 December 2011 02:37 )
Written by Edward Layne
Friday, 23 December 2011 02:31
Source - Guyana Chronicle
THE Guyana economy maintained robust growth in 2011 despite the continuing difficulties in the major export markets of the United States (U.S.) and Europe.
This is according to an Economic Commission for Latin America and the Caribbean (ECLAC) report released earlier this week. It said the estimated overall growth for 2011 is 4.8 percent while the forecast for 2012 is for an expansion of 4 percent. The compilation said Guyana is expected to continue its pursuit of the Low Carbon Development Strategy (LCDS), in light of the victory of the ruling People's Progressive Party/Civic (PPP/C) at the November polls, despite a much reduced majority in Parliament.
“In the first half of 2011, the economy posted growth of 5.9 percent. In the second half, growth was less robust and the overall figure for 2011 will be around 4.8 percent. Growth of 4 percent is projected for 2012, driven mainly by bouyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops, such as rice and sugar." – ECLAC
"Under the agreement with the Government of Norway for the joint implementation of this strategy, Guyana will receive some US$30 million in financing in 2012 and up to US$100 million annually through 2020," ECLAC said.
It added that the fiscal deficit widened due to higher capital outlays, with the budget deficit standing at about 3.5 percent of Gross Domestic Product (GDP) and this will widen to 6 per cent in 2012, especially because of the investment in the Amaila Falls hydroelectric project.
ECLAC noted that, in the first half of 2011, some US$32.2 million in debt relief was received through the Multilateral Debt Relief Initiative, the International Monetary Fund (IMF), the International Development Association and the Inter-American Development Bank (IDB). Debt servicing will be higher in 2011 and the debt-to-GDP ratio will also rise through borrowing for investment purposes."
The compilation said "the monetary policy pursued by the Bank of Guyana in 2011 continued to focus on stabilising prices and ensuring sufficient liquidity in the banking system."
ECLAC said, in the first half of 2011, credit to the private sector continued to expand but at a slower rate, relative to the corresponding period in 2010.
UNCERTAINTY
"Central Government credit declined while private sector credit grew by 6.7 percent. In 2012, there will be moderate growth in credit to the private sector in view of the uncertainty as to whether the ruling party, with a reduced parliamentary majority, will be able to maintain all aspects of its policy agenda," ECLAC said.
The Commission said the exchange rate was relatively stable in the first half of 2011, with a marginal devaluation of 0.25 Guyana dollars (G$) 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."
About economic growth and inflation, ECLAC said: “In the first half of 2011, the economy posted growth of 5.9 percent. In the second half, growth was less robust and the overall figure for 2011 will be around 4.8 percent. Growth of 4 percent is projected for 2012, driven mainly by bouyant commodity prices and increased production of gold, bauxite and alumina, along with agricultural crops, such as rice and sugar."
The Commission said inflation for 2011 will approach the target rate of 4.8 percent, because, for the first half of the year, it stood at 2.97 percent but should abate in the second half, as food prices inflation subsides.
Meanwhile, preliminary estimates for 2011 by ECLAC, suggest an increase in private sector employment, particularly in the areas of construction and wholesale and retail trade, with employment forecast to pick up further in 2012 through the start-up of a number of public sector capital projects.
The Commission said for the first half of this year, the current account balance deteriorated by US$19.6 million. "For 2011, the current account deficit will increase, reflecting rising prices for imports such as oil and commodities. As a result, reserves will decrease by US$ 36.1 million to 18 per cent of GDP. "
It concludes that, 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.
Last Updated ( Friday, 23 December 2011 02:37 )