Budget to offset impending economic downturn - Jagdeo

Budget to offset impending economic downturn – Jagdeo

Jan 08, 2009 News

President Bharrat Jagdeo yesterday announced that this year’s Budget has almost been drafted and should be laid in the National Assembly by month’s end or at the latest, early next month.

The President made the announcement during the first press briefing for the year.

According to the President, this year’s budget should be even larger than last year’s and the increased government spending is aimed at creating more jobs and at offsetting what he described as an impending financial downturn.

On October 8, last year, President Jagdeo said, “I am not afraid of the immediate impact on our financial sector. What I am more concerned about is the impact on the rest of our economy because if credit dries up around the world, local investment companies can be delayed.”

At the time he was commenting on the global financial crisis that had gripped the world.

“The financial situation is going to have major implication for countries like ours.

Fortunately here in Guyana, because we have a provincial type of banking system, we are not heavily integrated into the world’s capital, money or bonds markets.

“We are isolated from the impact, because if our banks were investing large sums of money in these markets they would have been affected.

“Similarly, if Guyanese were investing heavily in the stock exchanges, they would have seen significant losses but because just a small part of our portfolio has been invested in these markets our banking systems remain essentially sound. So we may be isolated from that immediate impact.

“Only this morning I was meeting with some people on hydropower.”

He said that despite the difficulties worldwide to access funding, such projects were important to the future of Guyana.

“So we have to do some financial engineering to make them go forward.”

At the press conference yesterday, the Head of State said that most countries in the developing world are predicting negatively for the New Year as it relates to economical growth, pointing to the fact that several sectors in Guyana were reliant on international prices.

He noted that the prices have already been declining and there will be an impact locally.

Guyana’s Gross Domestic Product is primarily dependent on exports and the prices for commodities on the international markets have been declining due to reduced demand.

The President said that Guyana was projecting a positive economic future unlike the developed world where countries are projecting otherwise.

The President chose not to review the economy of 2008, pointing to the imminent presentation of the Finance Minister where a detailed economic review and projection for 2009 is expected to be presented.

He noted that at present the framework for the budget was still being addressed but will be completed in the coming days.

The President also noted that this year focus will be placed on large projects that will be important for Guyana’s future.