Guyana’s economic projection revised downwards

Sep 24, 2012 News

– Finance Minister cites poor sugar performance

Guyana has produced a most commendable economic performance for the first half of the year despite an external environment that continues to be extremely unpredictable. However, due to sugar not performing as expected, the economic growth projection for the remainder of 2012 has been slightly reduced from 4.1 percent to 3.8 percent.

Dr. Ashni Singh

This was indicated by the Minister of Finance Dr. Ashni Singh during an interview with the National Communications Network today.
Dr. Singh said that sugar is unlikely to improve in the second part of the year hence the slight moderation.
Speaking about the unpredictable external environment, Minister Singh said the effects can be seen in the performance of sister CARICOM nations which have been buffeted by the external environment which continues to be unstable. Additionally, he noted that in the domestic economic environment in Guyana, some sectors performed well while others did not meet expectations.
Minister Singh emphasised that economic growth depends on the outside environment and Foreign Direct Investment (FDI) since “if the price outlook is not stable and favourable, large investors will not be investing in large projects, they will probably wait until they can get a more favourable environment.”
He explained that a period of unfavourable commodities’ prices not only impact current production and profitably but feeds into the economy.
Noting however, that with the progress made in diversifying the economy, he said Guyana is not heavily dependent on the external environment as it was about a decade ago. Minister Singh pointed out that at that time, the three major contributors to the economy were rice, sugar and bauxite but, these are no longer occupying the dominant positions.
The Minister added however, that while gold, other minerals, transport, ICT and construction are all showing increased importance, the three former sectors still contribute to a large portion of the economy. However, their vulnerability to outside prices does not create an impact on growth.
Minister Singh stated that while in the first part of the year non-sugar GDP grew by 6.2%, this depended on the private sector and consumers. He pointed out that rice continues to do extremely well along with gold, with significant investment locally in both sectors. Bauxite did extremely well in the first part of the year, he noted, apart from a brief period of interruption due to the Linden unrest which caused the projection of this sector to be revised.
The Finance Minister noted that long- term commitments and investments made in Guyana will produce a tremendous impact on the local economy. He also pointed to investments in bauxite, other minerals, oil, dry land rice and others, including expansion of current foreign investments. Minister Singh stated that these movements point to improved confidence in Guyana’s investment climate.
Regarding fiduciary oversight, the Finance Minister pointed to methods put in place to assure accountability and transparency of the economic sector. He outlined constitutional and parliamentary rules and regulations to ensure that this is done in order to avoid corruption.
He expressed confidence that upcoming projects such as the Amaila Falls, the expanding ICT sector and others all combined will provide an exciting future for Guyana.
Minister Singh said that Guyana has worked hard to develop its current international investor confidence, and likewise, must work to maintain it, and urged all stakeholders to ensure that Guyana remains an attractive place for FDI. (GINA)