Says VAT has skyrocketed consumer price index

With continually rising fuel prices driving up the cost of production and impacting negatively on the cost of living, Guyana is paying insufficient attention to the need to reduce its dependency on hydro-carbon fuels and to seek to realize the benefits of renewable energy alternatives, according to Chairman of the Board of Directors of the Guyana Bank For Trade and Industry (GBTI) Robin Stoby.

“With a country blessed by abundant sun, water and wind it seems strange that we have not made the most of our natural advantages,” Stoby said. And in a message contained in the GBTI’s 2007 annual report Stoby alludes to the possibility that local commercial banks could devise a way to be the catalyst for the development of alternative energy sources in Guyana.

Meanwhile, the GBTI Board Chair-man also used his 2007 report to comment on the impact of Value Added Tax on the Guyana economy, noted that while VAT has resulted in an improved fiscal position by mid-2007, the “down  side” of its implementation had been a steep rise in the consumer price index. “This situation requires close attention as our economy like many others relies on consumer confidence and spending to remain buoyant,” Stoby said.

Meanwhile, the GBTI Chairman envisages that the rising global food prices should impact positively on the local rice industry. Stoby noted that in the case of grains, the global increase in demand for fuel had seen a shift towards production for biofuels.

According to the GBTI Board Chairman the completion of the Takutu Bridge and the Berbice River Bridge during 2008 could signal a boost  in the country’s transportation and communication sectors. Stoby  said that the already growing trade between Guyana and Brazil validates GBTI’s decision to establish a branch at Lethem.

Meanwhile, Stoby  noted in his 2007 report that the year under review witnessed a decline in the holding of central government securities and an increase in loans and advances to the private sector by the domestic commercial banking system. “This shift of assets from the lower yielding government securities  to higher loans and advances has seen the banking sector posting record profits in 2007,” Stoby declared.