With a projected growth rate of 37.2 per cent for 2023, Guyana is expected to continue its trend this year, of outpacing every other Latin American and Caribbean (LAC) country when it comes to economic growth.
This is according to the International Monetary Fund’s (IMF) latest World Economic Outlook, which it released on Tuesday. Of the other LAC countries, St. Vincent and the Grenadines (SVG) at 6.0 per cent, has the next highest growth projections for this year.
But while SVG’s growth projections are expected to fall next year to 5.0 per cent, Guyana’s own is expected to increase to 45.3 per cent in 2024. The report states, however, that by 2028 Guyana’s economic growth will drop to 3.3 per cent.
Meanwhile, other LAC countries that will record single digit economic growth this year include Panama at 5.0 per cent, neighboring Venezuela at 5.0 per cent, Dominica at 4.9 per cent, St. Kitts and Nevis at 4.5 per cent and the Dominican Republic at 4.2 per cent.
In their analysis of the current state of the global economy, IMF stressed that despite the growth seen in specific countries inflation is building under the surface. In fact, IMF noted that inflation has proven to be more stubborn than had previously been expected.
“Inflation is much stickier than anticipated even a few months ago. While global inflation has declined, that reflects mostly the sharp reversal in energy and food prices. But core inflation, excluding the volatile energy and food components, has not yet peaked in many countries.”
“It is expected to decline to 5.1 percent this year (fourth quarter over fourth quarter), a sizable upward revision of 0.6 percentage point from our January update, well above target,” IMF said in their report.
According to the IMF, overall global growth is expected to finish at 2.8 per cent for 2024, before increasing to 3.0 per cent next year. While global inflation is expected to decrease, it will only be a marginal decrease from 8.7 per cent in 2022 to 7.0 per cent in 2023 and 4.9 per cent in 2024.
“Notably, emerging market and developing economies are already powering ahead in many cases, with growth rates (fourth quarter over fourth quarter) jumping from 2.8 percent in 2022 to 4.5 percent this year,” IMF explained in their report.
“The slowdown is concentrated in advanced economies, especially the euro area and the United Kingdom, where growth is expected to fall to 0.7 percent and –0.4 percent, respectively, this year before rebounding to 1.8 and 2.0 percent in 2024. Below the surface, however, turbulence is building, and the situation is quite fragile, as the recent bout of banking instability reminded us.”
Inflation has been a problem even in Guyana, but it is not a problem the People’s Progressive Party/Civic (PPP/C) government has met sitting down. Back in May 2022, President Dr Irfaan Ali had announced a series of ground-breaking measures to tackle rising cost of living.
These measures had ranged from cash grants to households in hinterland and riverine communities to the provision of free fertilizer for farmers, which are aimed at improving the lives of citizens.
The first initiative he had announced was the distribution of a one-off $25,000 cash grant to every household in the riverine and hinterland communities of the country. This measure would result in $800 million being pumped into the economy and would cushion the impacts of the rising cost of living, Ali had said.
He had also announced fertiliser support to farmers in order to cushion the impact of the rising cost of fertiliser on farmers and to limit the trickle-down effect on food prices, by the Government purchasing $1 billion in fertilisers for free distribution to farmers.
The third measure announced by the Government was the setting-up of a special unit to help landowners of both private and Government-owned lots build their houses.
President Ali had said the unit would support applicants with the process of applying to banks for financing and with the initial phase of construction by releasing the necessary resources. Persons would also have the option of choosing house models valued at $7 million, $9 million, or $12 million, for the Government to help them build.
Since taking office in 2020, the Ali-led Administration has introduced several measures to put more disposable income in the pockets of Guyanese. From the onset, Value Added Tax (VAT) was removed from water and electricity.
There has also been an increase in old-age pension and public assistance, putting $2.3 billion and $432 million, respectively, into the pockets of Guyanese.
