Latest update October 22nd, 2026 6:44 PM
Latest News
Budget Blues
The government is coming under manners from the Opposition about its stewardship of the economy. This is happening even as ExxonMobil is announcing a 10th oil find. Each new discovery makes the US$18M signing bonus even more unjust. The more oil Exxon finds, the smaller the signing bonus becomes relative to Guyana’s oil assets.
The United States dollar was trading yesterday for G$210 and, in some cases, for US$212. It is therefore hard to reconcile this with the projected inflation for 2018 of 2%.
It will be difficult for the public to be convinced that prices on the basket of goods used to estimate inflation moved by a mere 2% over this year. This does not accord with what consumers have been experiencing in the market. Prices have risen and their purchasing power has been eroded.
The price being demanded for United States dollars is going to lead to an increases in prices on the local economy. And this will mean higher inflation.
Questions have also been raised about the make-up of the declared growth rate for 2018. There is skepticism about the projected growth of the construction sector of 12% and that of livestock by almost 30%.
A 12% growth in construction is quite plausible. Guyana’s construction is not that massive. All it will take is one major project to spike growth in the sector. Investment to support the oil and gas sector in the first half of the year did just this. Therefore, the 12% growth in the construction sector, announced by the Minister of Finance, is quite realistic.
What does not seem realistic is a close to 30% increase in livestock production. Livestock is not a major export. The bulk of Guyana’s livestock production therefore has to be sold in Guyana. It is inconceivable that livestock production could have grown by almost one third, and yet this did not result in a reduction in local prices paid for livestock products.
Every year, we have persons questioning the official numbers churned out by the government about the performance of the economy. This was also the case under the PPPC, when the opposition PNCR and AFC regularly questioned the declared growth and inflation rates.
Statistics can be deceiving unless it is accompanied by detailed explanations. Take for example, the claim that tourism has increased. This may well be so, but how much do Venezuelans and Cubans account for the increases in visitors.
There is a credibility problem with the numbers, which are churned out each year in Budgets. It is high time that some independent verification of the numbers, particularly growth and inflation, take place, so as to end the skepticism.
This is an area in which the government and the Opposition can cooperate. They should agree to a joint task force to scrutinize the numbers and take steps to invite a credible international agency to audit the inflation and growth rates.
The Budget has to be credible. If the inflation rate is actually found to be higher than declared, then it means that the wages offered to some categories of public sector workers will not compensate for inflation. It means that the purchasing power of some workers will be far less than before.
If the growth rate is discovered to be overstated, this can harm Guyana’s international credibility. The country will suffer a loss of investment and financial flows.
Guyana has an adversarial political system. And very few have argued that the results of the local government elections, instead of continuing the combative politics, should lead to greater political cooperation.
A first step in this direction would be to have a joint verification of the economic indicators. This will not just boost economic confidence, but at the same time help to reduce political tensions, something that will be food for investment and business.
Share this:
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
Website Hits
Blunt of the day
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
