Latest update December 21st, 2024 1:52 AM
Almost four months into new year … Actual performance of economy last year still unknown-Opposition Member
Opposition Member, Irfaan Ali
After almost four months into the new year, the nation remains in the dark when it comes to the data that captures the actual performance of the economy for 2017. This point was recently made by Opposition Member and Chairman of the Public Accounts Committee (PAC), Irfaan Ali.
In a statement to a few media operatives, the politician stressed that to date, citizens do not have access to any official statistics from the Bank of Guyana or the Bureau of Statistics regarding: production, aggregate expenditure, employment, inflation, international trade and balance of payments, public finance, and public debt.
The PAC head asserted that while it is unusual for the Bank of Guyana to delay the publication of its Annual Report and Statistical Bulletin, he is not surprised. According to Ali, “a lot of massaging will have to be done to the actual data to bring them in line with the estimates on the economy as presented in the 2017 Budget.”
The Opposition Member said that the only data publicly available are those in the Statistical Abstract, which is limited to the performance of the banking sector.
Ali said that even if one conducts an analysis of that Statistical Abstract, there is an abundance of evidence, which would indicate that the economy is in crisis.
In this regard, Ali said that the Net International Reserves of the Bank of Guyana declined continuously from US$614.1 million in May 2015 to US$518.5 million; the lowest level since 2009. Ali stated that this decline confirms that the overall deficit in the balance of payments is worsening due to lower export receipts from the major sectors, especially rice and sugar, which are being dismantled by the government.
The Opposition Member said that apart from the depletion of the reserves, one observes that the gold reserves have also declined from approximately $15 billion in May 2015 to $1.9 billion by February 2018, a decline of $13.1 billion.
Ali concluded in this regard that the gold reserves are being used to cushion the drain on the Net International Reserves of the Bank of Guyana.
The former Housing Minister said, “We also observe from the Statistical Abstract that there were significant contractions in loans and advances to the agriculture, mining and quarrying and manufacturing sectors. Loans and advances to the manufacturing sector at the end of February 2018 was $5.6 billion less than the amount at end of May 2015.
Meanwhile, loans and advances to the agriculture sector and mining and quarrying sectors at end-February 2018 were $1.5 billion and $487.3 million less than the amount at end-May 2015.”
The PAC Chairman added, “The decline in loans and advances is a clear signal of lower investment by the local private sector. Further, when we examine the prudential soundness ratios published on BOG’s website, we observe extreme fatigue in the economy and the banking sector. According to the prudential soundness indicators, the non-performing loans to gross loans ratio was 12.19 percent at end-December 2017, more than two times the level at end-December 2012. This points to the inability of borrowers to repay their loans.”
Based on the limited statistics available, the Opposition Member said one can safely say that the economy is struggling under this Administration.
He emphasized that there is declining private investments while the dismantling of the rice and sugar sectors is contributing to the erosion of the International Reserves of the Bank of Guyana along with withdrawal of foreign currency from the foreign exchange market.
Given the overall contraction in the economy, Ali commented that businesses and households are finding it difficult to honour their debt obligations. He said that this is evident from the exponential increase in non-performing loans.
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