2017 Facts
- Growth in Real GDP of 2.9% compared with initial and revised targets of 3.8% and 3.1% respectively.
- Inflation is projected at a rate of 2.0% compared with an initial target of 2.5%.
- The 91-day Treasury bill rate decreased marginally from 1.68% in 2016 to 1.54% at September 2017.
- The Central Bank rate of the Guyana Dollar to the US Dollar remained stable at $206.5 while the average market commercial bank mid-rates for the US Dollar, Euro and Pound Sterling depreciated by 1.6% to $211.58, 7.3% to $237.44 and 5.5% to $272.79 respectively, between the period January to September, 2017.
- Overall balance of payments deficit of US$53.1 million compared with US$53.3 million deficit in 2016, improving by 0.4%.
- Merchandise exports are projected to decrease by 0.9% or US$1.5 million to US$1.44 billion while merchandise imports are projected to increase by 9.6% or US$138.5 million to US$1.59 billion.
- Current account deficit projected at US$235 million, compared to a surplus of US$13 million in 2016; and a surplus of US$181.8 million in the capital account, compared to a deficit of US$13.2 million in 2016.
- Current revenue of $192.7 billion compared with $177.3 billion in 2016, an increase of 8.7% and a rise of $6.7 billion or 3.6% from budgeted of $186.0 billion. Current expenditure is projected at $184.1 billion, an increase of 8.2%.
- Overall fiscal deficit of $49.6 billion compared with $39.4 billion in 2016 and budgeted amount of $56.5 billion.
- Gross external reserves of Bank of Guyana at the end of 2017 projected at US$616.8 million, an increase from US$596.7 million in 2016, or 3.4%. This will represent 3.4 months of import cover.
Size of the Budget: $267.1Bn, 7.1% increase
2018 Targets
- Growth in Real GDP of 3.8%, with the non-sugar growth rate anticipated to be 4.6%.
- The inflation rate projected is 2.4%.
- Balance of payments deficit is expected to widen to US$79.7 million from US$53.1 million in 2017, a downfall of US$26.6 million or 50.1%.
- Merchandise exports are projected to increase by 0.8% or US$11.2 million to US$1.45 billion and imports are projected to increase by 5.7% or US$90.2 million to US$1.68 billion.
- Current account to register an expansion in deficit of US$57.6 million to US$292.6 million. Capital account surplus of US$212.9 million compared with 2017 of US$181.8 million for 2017.
- Current revenue of $201.9 billion, an increase of 4.8%. Current expenditure of $256.8 billion, an increase of 6.0%.
- Overall fiscal deficit of $54.9 billion, an increase of 10.8%.
See more in 2018 Policy Issues and Targets on pages 22 to 26 and see Government of Guyana Financial Plan 2018 on pages 27 to 32.
Ram & McRae’s Comments
There is some improvement in real GDP over 2016 (2.6%) which was the lowest in a decade. In both 2016 and 2017, the projected growth in the economy was not achieved, despite two downward revisions. At 2.4%, the projected inflation rate in 2018 is expected to be higher than in 2017 which was in turn higher than in 2016 (1.3%).
Perhaps the most significant development in the economy was the Government’s successful response to what at one time appeared to be a significant deterioration in the exchange rate. In fact, fears were being expressed of a rate of anywhere between G$230 and G$250 to the United States Dollar while foreign currency was becoming scarce. Credit is due to both the Minister of Finance and the Governor of the Bank of Guyana for their decisive action in bringing down the spread between the selling and buying rates of foreign currency and controlling the rate.
However, there has been no corresponding action in connection with the money transfer agencies which are allowed to charge whatever rate they wish. It is hoped that the Government and the Bank of Guyana will take action to ease the burden on the poor who depend on remittances through money transfer agencies.
On the social side, there continues to be a slide in the population with a large spike in the net negative migration of 18,500 persons, a figure that has risen sharply since 2015. There is a 5% increase in reported Serious Crimes although the number of murders is projected to fall from 142 in 2016 to 116 in 2017.