Gov’t committed to crafting sustainable policies to boost economy – Min. Singh

Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh has explained that the government is paying keen attention to the global and domestic context in its of crafting fiscal and monetary policies that minimise potential risks.

Speaking during the Dr Randy Persaud  Show aired on the National Communications Network on Sunday, the minister made reference to the recent International Monetary Fund (IMF) report, which followed the discussions held by its team from August 28 to September 11, during the 2023 Article IV Consultation with local officials.

The report stated that Guyana’s current expansionary fiscal policy stance is appropriate, given the country’s development needs and the existing slack in the economy.

Minister Singh said the IMF was objective and balanced in its assessment of the state of Guyana’s economy, and that it speaks to the concentrated effort placed by the government to maintain balance between the policies and the country’s economic stance, especially amidst the global challenges.

“Guyana is not an isolated hermit in the global economic space. We are a small, open economy, and we are affected by what happens around the world. The world economy has been going through a tumultuous period. If you start from COVID-19 and what COVID-19 did in terms of the disruption of production and supply chains, the world is still to recover fully from the fallout of COVID-19,” he said.

While the major impacts of the pandemic within the public health sphere may have been managed, the economic fallout remains a global ail, as countries grapple to restore a sense of normalcy and even a return to the economic state pre-COVID-19.

Minister Singh also pointed out that this unfolds against the backdrop of the war in Ukraine, which had adverse effects on commodity prices, and has caused issues within the supply chain.

“We also have the global policy response. Around the world, both fiscal authorities and central banks have been responding to global inflationary pressures, including by raising interest rates, which has made it more costly for financing to be mobilised, both for governments and private investors,” Dr. Singh added.

During a recent visit to Washinton, DC, USA, President Dr Mohamed Irfaan Ali emphasised the government’s firm stance on responsible borrowing practices, supported by internal policies that guide the borrowing of loans.

These guidelines provide that Guyana will not borrow loans at a high-interest rate. Dr Singh explained that the move is in the country’s best interest.

“We recognise that in a world where interest rates are rising, we face a lot of exposure from a very hefty interest bill. Were we exposed to rising interest rates, we would have had a dramatically increased interest bill, and it would have been much more expensive for us to borrow.

“Formulating your economic policy in an environment where this is the global context, and then in the domestic context where you have a rapidly growing economy which also inevitably brings a risk of overheating. One has to be extremely careful in crafting your policy stance in order to ensure that you manage and contain all of the risks,” the senior minister underscored.

Minister Singh noted that this is something the government has been able to navigate with success, and the position is clear in the IMF report.