The economy was sluggish throughout the first of the year, according to the Chairman of the Guyana Bank for Trade and Industry (GBTI), Robin Stoby.
He said this was despite the exceptionally early presentation of the budget in January this year. In his chairman’s report in today’s Stabroek News to accompany the interim financial statements for the first half of the year, Stoby said that the expectations and confidence that customarily flow from the fiscal policies of such a budget have not been manifested so far.
Stoby’s prognosis adds to numerous statements from members of the business community this year that the economy is in a slump and the government needs to take steps to stimulate growth.
Stoby said it was evident that the loss of the Venezuelan market for a sizeable portion of paddy and rice coupled with the very low world market price for rice would pose a difficulty for the rice industry. Noting that sugar output was marginally below target for the first half, Stoby said that with the world market price for sugar being less than the cost of production, its contribution to the Gross Domestic Product has not improved.
He noted that gold has been a bright spot but that the housing sector which provided a stable lending opportunity for the banking sector has levelled off after years of good growth.
Adverting to the prospect of the loss of correspondent banking, Stoby said it behoved GBTI to exercise more “dexterity” in navigating the bank’s path to continued growth and stability.
The GBTI board approved an interim dividend of $6 per share on the basis of a net profit after tax of $961m. This is down from $1.05b for the same period last year.
Net interest income was $2.36b compared to $2.39b last year. Loan provisioning was up significantly from $104m last year to $294m this year.
Increased bad loan provision across several banks has been taken as another sign of a decline in various parts of the economy.