Economy crawls to modest 2.6 % growth rate in 2016

Nov 29, 2016 News

By Kiana Wilburg
For the first time since 2009, Guyana’s economy faced a number of extraordinary economic circumstances which saw it crawling in 2016 to achieve a modest 2.6 percent growth rate. This was revealed yesterday as Finance Minister Winston Jordan presented the 2017 budget to the National Assembly.
Jordan during his presentation reminded the members of the House that the budget for 2016 projected an overall real growth rate of 4.4 percent.
At mid-year, he said that a real economic growth rate of 2 percent was achieved. However, since several industries and sectors including sugar, rice, construction, and wholesale and retail trade, were showing signs of distress, already, the economist said that the projected growth rate for 2016 was revised downwards to 4 percent.
However, the Finance Minister noted that there were several unexpected developments since that time which included the downsizing of Barama and Demerara Timbers Limited’s operations in the forestry sector; structural changes and ongoing strikes in the sugar industry; and the slow pace of implementation of the Public Sector Investment Programme (PSIP).
Those factors, he said, “conspired” to reduce the real growth rate to 2.6 percent for 2016. Though the figure is perhaps the lowest in recent times, it is still a reflection of positive growth.
The last time the economy recorded growth rate this low or “modest” was in 2009. Prior budgets show that the Guyanese economy achieved real growth of 3.1 percent in 2008, a most commendable achievement under the circumstances that prevailed following growth rates of 5.1 and 5.4 percent in 2006 and 2007, respectively. In 2010, real GDP expanded by 3.6 percent in 2010 while in 2011; the domestic economy achieved a GDP of 5.4 percent.
Real gross domestic product grew by 4.8 percent in 2012, and in 2013, the Guyanese economy recorded its eighth consecutive year of growth, with real GDP expanding by 5.2 percent.
In 2015, the Finance Minister had reported that the estimated half-year growth of 3.2 percent represented a slippage relative to the 3.9 percent achieved for the half-year of 2013. This performance caused the growth rate for 2014 to be scaled down from 5.6 percent to 4.5 percent. Unfortunately, Jordan said that even that lower growth rate was not achieved, for the economy contracted to 3.8 percent. He had said that this was the first sign that the economy was slowing down, with the rapidly deteriorating political climate being identified as a significant contributory factor.
Additionally, the Finance Minister yesterday noted that budget 2015 concentrated, essentially, on stabilizing the economy, while fulfilling this Administration’s 100-day promises. He said that it also outlined a fresh approach to the management of the economy for the next five years.
Jordan said that Budget 2016 started to lay the foundations for stronger institutions and restoring the confidence of our people in their government.
The economist said that the reduced performance of several key sectors in 2016 tested the nation’s resolve as a people and as a country.
“Indeed, the absence of evidence-based, results-focused, approaches to policy interventions continues to beset our attempts at effective government and governance. However, guided by our creole proverb, ‘one one dutty build dam’, we intend to move our country forward, brick by brick, road by road, bridge by bridge, community by community, town by town, region by region,” the Finance Minister stated.

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