The 2019 budget got underway with Finance Minister Winston Jordan projecting 3.4 per cent economic growth, while noting that there will be down turns in critical sectors and a widened balance of payment deficit for 2018.
He noted however that 2018’s projected growth rate is a significant improvement from the dismal 2.1% growth rate recorded in 2017.
Minster Jordan noted the initial target was 3.8 per cent but that was revised to 3.4 per cent given the performance in gold and sugar.
He said the projected annual growth rate was readjusted for upward growth of 3.7 percent in 2018.
The Minister also juxtaposed growth rates in other countries such as the United States, India and China, before he provided Guyana’s projections. In Latin America, Jordan said that growth is expected to slow due to trade pressures and volatile markets. He even referenced other Caribbean countries.
Despite the projected growth rate, the Minister revealed that the mining sector will contract by 2.3 per cent for the year, despite sterling contributions from the large scale miners. He noted that there have been declines in small and medium scale miners’ declarations.
According to Jordan, the manufacturing sector is expected to grow by 0.9 per cent due to small increases in manufacturing outside of sectors like rice. He also said that a 1.9 per cent contraction is projected for the fisheries sector and that the forestry sector will also contract by 2 per cent.
Meanwhile, he projected the livestock sector to grow by 21.1 per cent, with the construction sector expected to grow by 12 per cent.
According to the Finance Minister, the balance of payment deficit is expected to increase to US$180.7 Million. He noted that the current account is expected to worsen due to the merchandise account. There are increased merchandise imports and decreased merchandise exports.
Jordan blamed the downturn in gold, sugar and rice exports for this.
However, the Minister said the deficit will be financed by measures including drawdowns on Guyana’s foreign reserves and debt forgiveness.
Jordan said inflation rate is expected to increase by 2 per cent by the end of 2018.
Budget 2019 is being presented under the theme: ’Transforming the economy, empowering people, building sustainable communities for the good life’.
This is the fifth budget of the Coalition Government since it took office in May 2015.