Despite external and domestic shocks, Guyana’s economy showed resilience and registered its fifth consecutive year of “robust growth,” according to the latest review by the International Monetary Fund (IMF).
In a statement released yesterday, Therese Turner-Jones, chief of a recent IMF mission to Guyana, said that real Gross Domestic Product (GDP) growth is projected at just shy of 4%, which is above last year’s figure. This was underpinned by increased activity in the gold and services sector.
The statement also mentioned an uptick in sugar though figures on the ground do not support this. Even in the backdrop of risk including concerns about the sugar sector, Turner-Jones said the team expected “growth to continue on a steady path, supported by expansion in the mining and construction sectors.” It also noted that despite a small increase in food prices inflation remains relatively low. Talks between the two sides focused on strategies to preserve fiscal and debt sustainability over the medium term in the context of the Low Carbon Development Strategy and to further boost economic flexibility and resilience to shocks, while continuing to reduce poverty. “Fiscal consolidation remains a priority, consistent with the authorities’ commitment of maintaining a sustainable medium term debt path.
Staff recommended strengthening ongoing efforts to improve the fiscal outturn, given existing challenges in the sugar sector. Maintaining the strong fiscal stance would also help to support external sector stability.
Staff welcomed the continued improvements in public financial management and tax administration, especially with respect to compliance and risk management. It welcomed the increase in the gross foreign reserves position, to about five months of imports at present,” Turner-Jones added.
She said too that while the banking system remains liquid and well capitalized, continued vigilance is necessary, particularly in the backdrop of the ongoing housing boom. She noted that recent enhancements in financial sector supervision and regulation, including new guidelines on risk management, are welcome.
Turner-Jones also commended the dissemination of financial sector indicators, which now appear on the Bank of Guyana’s website.
The IMF Executive Board is expected to discuss Guyana’s Article 1V consultation in January 2011. Turner-Jones expressed the mission’s gratitude “for the open communication and close collaboration enjoyed over the past two weeks not only with government officials but with all Guyanese stakeholders, with whom it had the privilege of exchanging views.”
