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IMF reviewed, endorsed Govt’s plan for lifting living standards – VP

…says Guyana received commendation for its fiscal discipline

During the International Monetary Fund’s (IMF) Article IV consultations, Guyana’s economic growth and performance was thoroughly reviewed. So too, however, was the State’s poverty reduction plans, and according to Vice President Bharrat Jagdeo, these were endorsed.
During his recent press conference, Jagdeo noted the preliminary comments the IMF made about Guyana’s economic growth as well as the Consumer Price Index (CPI), which measures inflation and the spending power of a citizenry.
“Non-oil GDP grew by 12.3 per cent. One of the highest figures in the world for non-oil GDP. CPI inflation reached 7.2 per cent at the end of 2022, in line with other countries in the Region. People talking about cost of living… what they’re saying here is that the CPI at the end of last year, that is the consumer price index grew by 7.2 per cent, in line with the other countries in the Region,” Jagdeo said.
“What was different here in Guyana, is our mitigating measures. Last year we paid out about $5 billion directly to assist people on the cost of living measures. We lowered the freight charges. We levied the taxes on freight charges. We did not increase water and electricity prices. We absorbed all the costs on water and electricity. There were a series of intervention measures that we put in place to abate the CPI increase.”
And while Jagdeo acknowledged that seasonal issues could result in spikes in prices for commodities, such as the drought causing increases in vegetables, the IMF itself reported in its analysis that from July 2022 to July 2023, the CPI only increased by 1.2 per cent… lower than a lot of other countries.
According to Jagdeo, the IMF recognised that Guyana’s inflation levels were in line with what was happening around the Region in other countries. In fact, the Vice President pointed out that the IMF endorsed the plans that were being implemented by the People’s Progressive Party/Civic (PPP/C) Government and commended Guyana’s fiscal discipline.
“There is rapid growth in the economy. We have a modernisation plan that is supporting this group. The consumer price index in Guyana has grown in line with regional averages. And there were mitigating measures in Guyana’s case and now it has declined seriously. The third (headline said) the fiscal and monetary policy mix is appropriate at this time. So that means an endorsement of both our fiscal and monetary policies.”
“Remember we don’t have an IMF programme. So, they don’t tell us what monetary or fiscal policies to put in place, unlike countries that are in a programme. They come and review after, that is why these article four consultations are done in every economy in the world… the fourth headline said the authority’s commitment to fiscal discipline is welcome and allows for a balanced growth path.”
During their sojourn in Guyana, the IMF team led by Alina Carare, met with the Vice President, Finance Minister Dr Ashni Singh, Minister of Parliamentary Affairs and Governance Gail Teixeira, Bank of Guyana Governor Dr Gobind Ganga and other senior public and private sector officials and stakeholders.
Having completed its 2023 Article IV consultations, the IMF noted that Guyana’s Gross Domestic Product (GDP) continues to record strong growth. They projected that Guyana will record extremely fast real GDP growth of 38 per cent in 2023. Last year, Guyana recorded real GDP growth of 62.3 per cent – the highest in the world. And according to the Fund, public investment had a major role to play in non-oil economic growth.
Guyana has already recorded a whopping 59.5 per cent real economic growth in the first half of 2023, driven not only by the oil and gas sector, but also the non-oil economy, which has been growing for successive years.
This was contained in the recently released Ministry of Finance Half-Year Report, which presents stats on Guyana’s economic performance for the first half of the year. The non-oil economy, according to the report, grew by 12.3 per cent. According to the report, the growth trend is expected to continue.
The report further disaggregates the growth by sectors. For instance, the gold mining and quarrying sector is estimated to have grown by 89.9 per cent in the first half of the year, driven by increased output. The report explains that these increases outweighed the declines observed in the gold mining and bauxite mining subsectors.
Meanwhile, agriculture, forestry and fishing sectors are estimated to have expanded by 7.6 per cent in the first half of the year. This was driven by growth in all subsectors – namely other crops, rice growing, livestock, fishing, forestry, and sugar.