IMF Executive Board Concludes Article IV consultation with Guyana
-Economic growth slowed down but became more broad-based
-In 2017, real GDP growth was 2.1 percent, with the non-mining GDP rebounding from its contraction in 2016
-Inflation remains relatively low, and the monetary stance accommodative
-Oil discoveries have significantly improved the medium- and long-term outlook
DPI, Guyana, Tuesday, July 17, 2018
“Guyana’s economic growth slowed in 2017 but became more broad-based. The economy grew by 2.1 percent, down from 3.4 percent in 2016, on the account of lower than expected mining output and weak performance in the sugar sector. Nonetheless, non-mining growth rebounded to 4.1 percent following a contraction in 2016. Inflation remained stable at 1.5 percent at end-2017, largely driven by food items, while core inflation was close to zero.”
This is according to the International Monetary Fund’s (IMF) latest report on Guyana. The report detailed that, “The external balance turned negative due to weaker than expected export growth and higher oil prices. In 2017, the current account recorded a deficit of 6.7 percent of GDP from a surplus of 0.4 percent in 2016. The financial account improved due to FDI, particularly in the oil and gas sector, and higher loan disbursements to the public sector.”
The report added that Guyana’s gross reserve cover stood at 3.2 months of imports at end of 2017. The central government’s deficit was noted as, remaining stable at around 4.5 percent of GDP in 2017. It also listed, improvements in tax administration which “contributed to a 1.2 percentage point increase in the tax revenue to GDP ratio, which was partly offset by a 0.4 percentage point decline in the ratio for non-tax revenue. Public debt stood at 52.2 percent of GDP at end-2017.”
The IMF described Guyana’s medium-term prospects as very favourable. It added that oil production, expected to commence in 2020 and additional oil discoveries, have significantly improved the medium and long-term outlook. Guyana’s economic growth is projected to be 3.4 percent in 2018, driven by continued strength in the construction and rice sectors, and a recovery in gold mining.
By: Paul Mc Adam.