THE just released IMF Country Report for Guyana (No. 10/293) paints a positive picture of economic development in the country.
The report specifically states that Guyana has done a very good job weathering the global financial/economic crisis.
According to the IMF, despite the pass-through-effects of the global financial crisis as evidenced in flows in FDI and remittances, “the financial sector appears to have been resilient to the direct impact of the global shock…”
The IMF also suggests that the strong macro-economic environment in the country is propitious to further economic growth.
The IMF notes that the most visible impact of the global financial contagion is the collapse of CL Financial in Trinidad and Tobago and the resultant impact on CLICO-Guyana. As the IMF anticipated, the Government of Guyana is now addressing the fallout. GoG has committed more than $3 billion for policyholders.
Regarding monetary policy, the IMF notes that the right balance was struck between “ensuring price and external stability while availing liquidity to stimulate credit growth.” International reserves and exchange rate pressures were effectively dealt with through various open market operations.
Inflation declined significantly in 2009. It moved from 6.4% in 2008 to 3.6% in 2009.
The external current account deficit narrowed and external financing increased. International reserves jumped by US$267 million in 2009. Although there was some externally induced deceleration, the business community did not downsize operations, nor did it resort to widespread layoffs.
Consumer Non-Performing Loans (NPLs) dropped by 35%, a very positive sign for a more structured credit market. The IMF report states that the debt-to GDP ratio is expected to continue on a downward path, a trend that would yield more resources for on the ground economic development.