…domestic economy recorded real growth of 2.8 percent in first half of 2010
- overall growth for the year now projected at 2.9 percent
FINANCE Minister Dr. Ashni Singh yesterday reported that the Guyana economy continued along a path of steady growth in the first half of this year, despite persistent difficulties in the sugar industry, continued adverse movement in commodity prices and the effects of the sliding Euro.
“The continued resilience of our economy has provided support to poverty reduction, emphasis on the accelerated implementation of programmes in the social sectors as well as key infrastructure gaps being addressed”, he said in the report presented to the National Assembly. (See highlights on page ???)
The minister said that in addition, the recent rebasing of the national accounts now provides a clearer picture of the drivers of growth in the economy.
“It reflects the results of the government’s policy initiatives and private sector efforts at diversification over the last decade, which together have yielded demonstrable results”, he said.
“Further, the launch of Guyana’s Revised Low Carbon Development Strategy (LCDS) in May of this year saw the outcome of almost a year of review and consultation across the country in addition to input from climate change negotiations at the United Nations, and other international climate change initiatives.
The LCDS now outlines a national strategy to forge a new low-carbon economy over the coming decade which, coupled with our National Competitiveness Strategy, will position Guyana well into the medium and long term”, Dr. Singh said.
He reported that the domestic economy recorded real growth of 2.8 percent in the first half of 2010, with non-sugar gross domestic product expanding by 3.1 percent. As a result, overall growth for the year is now projected at 2.9 percent and non-sugar growth at 2.4 percent.
At the end of the first half of 2010, the overall balance of payments reflected a surplus of US$34.6 million compared to a surplus of US$57.3 million for the corresponding period in 2009.
This, the minister said, is on account of an expansion in the current account deficit due to higher imports of intermediate goods, particularly fuel and food, as well as capital goods such as agricultural and building machinery. This was partially offset by the increase in gold and bauxite export earnings and the improvement in the capital account due to higher disbursements of the non-financial public sector and increased foreign direct investment.
Singh said the inflation rate at end of the first half of 2010 was 2 percent, driven primarily by movement in the food category. Price increases in the food category arose mainly from supply constraints of poultry meat. This was tempered by more moderate price developments in other categories of the consumer price index.
Based on the developments in the first half of the year, the inflation target has been revised to 4.5 percent compared to the 4 percent at the time of budget, Singh said.
The Finance Minister said the performance of the economy is most commendable, viewed against the backdrop of a global outlook characterised by uncertainty, with the developed economies still seeking the delicate balance between policies aimed at stimulating output and measures required to contain indebtedness and achieve fiscal sustainability.
He said: “The domestic economy’s favourable performance demonstrates the strong underlying fundamentals on which the economy is built and reflects gains made over the years at diversifying the sources of growth. Traditional sectors such as rice, forestry, and gold continue to be important drivers of growth and, coupled with favourable performances in other sectors such as construction, information and communication, health and social services, compensated for more subdued performances in the sugar and bauxite industries.
“The sustaining of real growth in the productive sectors translated to a favourable balance of payments outturn, with significant growth in exports helping to offset increased imports. At the same time, fiscal performance remained strong, allowing for accelerated project and programme implementation in the various sectors of government operations.
“Taken together, these results point to continued fulfillment of the government’s ongoing commitment to prudent and stable macroeconomic policies, and to strengthening Guyana’s economic base through modernisation and diversification along a low carbon path.”