… Says the world recognizes Guyana back on track
The recent International Monetary Fund (IMF) projection that Guyana’s economy will grow 16.4 percent in 2021 is the product of the return to democracy and political and economic stability.
This is according to Finance Minister Dr Ashni Singh, who was unexpected by the development, which the IMF made known in its biennial “World Economic Outlook”, when questioned about it by the media on the sidelines of a day-long event Wednesday.
According to the Finance Minister, the IMF’s previous assessments came at a time when Guyana was in political turmoil brought about by the Government’s refusal of the A Partnership for National Unity / Alliance for Change (APNU / AFC) to dismiss office.
“At the time the IMF would have made their forecast on the Guyanese economy, around September 2020, there would have been a lot of uncertainty and perhaps less clarity about where the country was going and what prospects and opportunities there would be. Since then, of course, things have been clarified. We got a government office in August 2020.
“We have had two budgets, which have now outlined the Government’s economic and fiscal plans. Those, of course, helped to resolve any policy uncertainties that may have existed. Both budgets have sent a clear indication of where our Government is taking economic policies and what our intentions are. And with the benefit of the signal clarity we would have sent, I am not surprised by the upward review of the IMF’s growth prospects, ”he said.
According to the Finance Minister, the IMF’s projection reflects the growing optimism that has returned to the Guyanese economy. He recalled that the uncertainty in the economy other than oil dates back to when the former APNU / AFC Government dropped a No Confidence Motion in the National Assembly in December 2018.
“What that reflects is the extraordinary optimism that has returned to the Guyanese economy. For a long time, the reality is that severe uncertainty has led the Guyanese economy all the way back to December 2018, when the No Confidence Motion was passed.
“From the time the No Confidence Motion was passed, there was some political uncertainty about what will happen. Initially, everyone expected that an election would be held within 90 days. That didn’t happen. And then there was back and forth with various court issues. ”
He also highlighted the fact that a number of projects and foreign investments had been delayed during that time, as many adopted a “wait and see” stance on Guyana’s political scene – a stance that was diminished when President Dr. Irfaan Ali was sworn in as President in August 2020.
“Therefore, a return to democracy in August 2020 and the clarity of policy signals sent by the two budgets would clearly have conveyed to the rest of the world that Guyana is once again back on track, open for business. Many of the paused projects have now resumed, ”Dr Singh noted.
Another international financial institution has only recently reported that Guyana was the only Caribbean country with a positive growth in Gross Domestic Product (GDP) in 2020. This is according to a recent World Bank report that shed light on how Latin American economies were successful and Caribbean. in 2020.
According to the World Bank 2021 report, “Renewal with Growth. LAC Semiannual Report ”, Guyana did what the 27 other countries in the Region could not – record GDP growth, despite the COVID-19 pandemic.
“Despite the COVID-19 crisis, Guyana’s GDP grew by more than 20 per cent in 2020, as the exploitation of very large oil discoveries began. More modestly, Paraguay’s GDP emerged almost unscathed from the crisis, although this robust economic performance was not sufficient to prevent a new wave of social unrest, ”the report said.
The IMF growth projection is a more conservative estimate than the one the Government had. With the measures announced in the 2021 budget, the Finance Minister had said in February that Guyana’s real GDP is projected to grow 20.9 percent, with the non-oil economy growing by 6.1 percent.
However, he explained that the projection was based on the assumption that the reopening of the economy occurred with COVID-19 restrictions being gradually lifted and, therefore, subject to significant risks of disadvantage. Similarly, the agriculture, fishing and forestry sector is expected to expand by 5.6 per cent while the mining and quarrying sector is forecast to grow by 39.1 per cent.