Guyana’s 2018 growth rate has been revised to 3.4%, according to Finance Minister Winston Jordan. Speaking last week at the 48th Annual Meeting of the Board of Governors of the Caribbean Development Bank (CDB), Jordan indicated that real growth is projected to be 3.4%, slightly below the 3.8 % announced when he presented the National Budget for 2018 last year.
He further noted increased output in rice, construction, manufacturing and services sectors and added that this robust performance is expected to continue into the medium term, with anticipated oil production in early 2020 projected to contribute to a dramatic increase in the Gross Domestic Product (GDP) of Guyana.
“The Government is aware of the need to strengthen institutions and broaden the economic base, so as to build a resilient economy that is capable of withstanding both external and domestic shocks. We are in various stages of preparation of pieces of legislation, which are aimed at guiding the management of oil revenues for the benefit of present and future generations,” the minister related.
An economist by trade, Jordan drew a correlation between Guyana’s projected performance and that of the world economy and he noted that there is currently a positive outlook for both.
“In spite of both domestic and external shocks, Guyana has maintained its positive growth trajectory that has been evident for over a decade,” Jordan said, while noting that according to the International Monetary Fund, global output, which grew by 3.7% in 2017, is expected to improve to 3.9% in 2018, with growth being more broad-based. “This upward trend brings renewed hope for the developing economies of the Caribbean, many of which are still reeling from catastrophic hurricane damage, high debt burdens,” he added.
Last November, Jordan announced that the real growth of the economy this year is targeted at 3.8%, with the non-sugar growth rate anticipated to be 4.6%.
At the time, he stressed that government’s intensified focus on diversification and value-added production in the non-sugar agriculture sector is absolutely critical while the sugar industry continues to undergo restructuring. He explained that this is key to ensuring that the sector remains productive and growth-stimulating.
The budget office has had a difficult time over the last few years in forecasting the performance of the local economy.
In 2015, a projected growth rate of 3.4% was revised to 3.1% before 3.0% was recorded as the actual rate of growth of the economy in that year. According to the Bank of Guyana’s 2015 End of Year Report, while the drivers of this growth were gold, rice, sugar, livestock, manufacturing as well as services activities in the transportation and storage sub-sector, there were declines in the output of forestry, bauxite and fishing as well as activities in construction and wholesale and retail trade.
In 2016, a growth rate of 4.4% was projected. At mid-year, having recorded a real economic growth rate of 2% the projected growth rate was revised downwards to 4% but a mere 2.6% in growth was actually recorded. The minister had noted then that several unexpected developments, including the downsizing of Barama and Demerara Timbers Limited’s operations in the forestry sector, structural changes and on-going strikes in the sugar industry, and the slow pace of implementation of the Public Sector Investment Programme (PSIP) conspired to achieve these results.
Additionally, for 2017, the economic growth projection of 3.8% was adjusted downward to 3.1% then 2.9%.
When he presented the 2017 budget, Jordan had projected a growth of 3.8% on the back of mining and quarrying and an expected recovery in other sectors. However, by mid-year, an economic growth rate of 2.2 % was achieved. Though this represented a 2% increase over the same period in 2016, the Mid-Year Report, revised downwards the overall growth to 3.1% on account of expected weak performance in the mining and quarrying sector, and the sugar and forestry industries. In presenting the 2018 budget, Jordan noted that the new projection for real growth of the economy in 2017 is 2.9 %. The actual growth rate has since been reported as 2.1%.
In making his presentation to the CDB, the Minister said that the recorded 2017 growth rate reflected improved performances in the forestry and rice sectors, while contractions were witnessed in sugar, and the construction and mining sectors.
“We continued to strengthen public financial management, with significant improvements recorded in both revenue administration and the capital expenditure implementation ratio. Further, we emphasised stimulating private sector activity in more structured ways, especially in light of the emergence of the oil and gas sector with its transformational potential and developmental impact on the economy,” he stressed.
In this vein, he represented the recently adopted Public-Private-Partnerships (PPPs) Framework as a structured platform for the local and external private sector to meaningfully engage the government in achieving the national development agenda.
“The formulation of the PPP Framework for Guyana is as a result of my government’s proactive stance about obtaining value for every dollar invested, especially in the [PSIP]. Moreover, as Guyana rapidly approaches oil producer status, with the attendant massive inflow of new resources, the inclusiveness of all stakeholders in national development becomes a pressing imperative,” Jordan said.
The PPP was laid in Parliament on April 26th, 2018.