Downtown businessmen are predicting a tough post-Christ-mas trading period which most say could extend for several months into 2008.
Over the past week Stabroek Business has spoken to several retail traders in the food, clothing and hardware sectors most of whom are predicting that consumer spending could be reduced considerably, at least up to April this year.
The businessmen have identified a late surge of Christmas spending, particularly on food and household furnishing which they say would have “swallowed up” much of the end-of-year salary increases and bonuses paid out to salaried workers towards the end of last year.
Rising food costs which hit consumers hard in 2007 are expected to continue to exert demands on wages and salaries which some of the businessmen feel have not risen sufficiently to keep abreast of the cost of living.
“The main problem with consumer spending over the next few months is that wages and salaries are already well behind the cost of living and whatever price increases accrue after the 2008 budget, those are likely to place even greater strain on disposable income,” a Water street businessman told Stabroek Business.
The business community is also concerned that the high volume of credit afforded by the major department stores during the pre-Christmas period will create a situation in which consumers will be “locked in” to making hire purchase payments that will further reduce spending on consumer goods, including food items.
Towards the end of last year the volume of sales of housegold furnishings and other items increased significantly on account of the ‘no deposit’ facility offered by department stores across the country. Additionally, members of the disciplined services were afforded credit facilities for food items by the Guyana Police Consumers Coopera-tive Society.
On January 5 President Bharrat Jagdeo announced that the country’s income tax threshold would be increased from $28,000,00 to $35,000.00. The President also announced that public assistance would be increased from $2,470.00 to $4,500.00 with effect from January this year. However, those businessmen with whom Stabroek Business spoke said that these increases had been negated even before they had been announced by earlier rises in the prices of consumer goods, primarily food, and the 16 per cent Value Added Tax implemented on January 1 last year.
