GEORGETOWN: The International Monetary Fund (IMF) is projecting Guyana’s economic growth for 2013 to be 4.8 per cent, continuing the nation’s expansion in economic activity in recent years.
The U.S.-based financial institution, which recently concluded an Article IV consultation on the country, said that during the last decade, Guyana’s strong macro-economic performance has contributed to a reduction in public debt levels and sustained poverty reduction. It said that the economy has experienced seven years of uninterrupted growth, averaging about four per cent annually.
The key pillars of the macro-economic resurgence have been sustained reforms, in particular the implementation of the Value Added Tax (VAT), favourable commodity prices, significant inflows of Foreign Direct Investment and debt relief under the Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief Initiative initiatives.
The IMF said real economic activity expanded by 4.8 per cent in 2012 in large part to broad-based growth in agriculture, manufacturing, mining, construction and other services.
It said 12-month inflation remained low at 3.4 per cent, notwithstanding higher energy and food prices. Last year, the overall fiscal deficit was 4.5 per cent of Gross Domestic Product (GDP).
The IMF said the 12-month inflation was expected to remain low at around 3.5 per cent by year-end.
“The revised 2013 budget envisages an overall fiscal deficit of 5.2 per cent of GDP, largely related to worsening performance of public enterprises which are projected to return a deficit of 0.4 per cent of GDP compared to a surplus of 1.3 per cent in 2012,” it said. “Higher VAT receipts are projected to raise central government non-grant revenue by 0.9 per cent of GDP.
The IMF said it welcomed Guyana’s strong growth over the past several years, underpinned by favourable commodity prices and robust foreign direct investment.
While the medium-term economic outlook remains positive, the IMF said it was encouraging the authorities to persevere in their commitment to sound policies and reforms to strengthen policy buffers, promote more inclusive growth, and further reduce poverty.