A look at some trends in the economy

Part 1

Political condition

There has been much speculation about the Guyana economy over the last year or so.  One thing that is clear is that in the lead up to the general elections held last year there was a high degree of political uncertainty.  Such political condition often reflects itself in the decisions of people and the actions that governments can take.  People invest in businesses and people spend money to take care of their households.  When people and businesses hold back their spending, governments usually step in to keep aggregate demand buoyant.  This type of government action is described as business pageKeynesian economics in keeping with the belief that governments must step in to keep the economy stimulated.  In keeping with this thinking, this article examines how the three key participants (households, businesses and government) in the Guyana economy behaved over the last year.  This would be reflected in their spending levels.  Borrowing by the private sector would also provide an indication of the behaviour of businesses and households.  Linked to borrowing would be the behaviour of the market for interest rates.  Of necessity, the article will be presented in two parts.

Handicapped

While Guyanese would wish to know the current situation in the economy, it is only possible to work with the data that is available publicly.  As a result the focus would be largely on historical data since the Bank of Guyana has published up to May 2016.  The discussion particularly about