Guyana’s projected increase in inflation for 2018 is mainly due to the coalition Administration’s mismanagement of the economy, former Junior Finance Minister Juan Edghill claims.
Edghill says the Opposition People’s Progressive Party/Civic (PPP/C) is not surprised that the International Monetary Fund (IMF) has projected that Guyana’s inflation will continue to rise in 2018.
“We are not surprised by that report, and this is because the mismanagement of the economy is what is having this adverse effect on the way things are going here,” he opined.
What is more worrying, according to the former minister, is that this could lead to several other issues, such as a depreciated currency, and place a burden on the real wages.
“There are going to have situations where you have money in your hand but you can’t buy the product or commodity that you are looking for, because the money doesn’t have the value it used to have. That is also going to be tied into the fact of a depreciated currency,” he said.
The Opposition MP said Government may be cognisant of that fact, and that may be one of the reasons behind the administration “trying to control the cambios with the difference between the buying and selling rate, and putting money into the system to save the shortages.”
Edghill says the core issue will be the adverse effect on real wages for workers; because once there is inflation, employers will have to start to think about the value of the money workers are getting.
Pointing to the recent case wherein the Guyana Public Service Union (GPSU) rejected the Government’s proposed increase, the MP said that consideration must also be given to the rise in inflation.
Edghill also reminded that these are all signals that the Government is sending to the business community, both local and foreign, which is causing those communities to have a lack of interest in investing locally.
According to the IMF’s Regional Economic Outlook update on Latin America and the Caribbean, economic growth in Guyana is being supported by two large gold mines and “positive sentiment ahead of oil production.”
According to the IMF in its report, Guyana’s projected output growth (value for goods it produces) for 2017 is 3.5 per cent. For the year 2018, it is 3.6 per cent. But the IMF also projected a 2.6 per cent rise in inflation (rate at which prices for goods and services increases) for 2017, while a 2.7 per cent increase is expected for next year.
The IMF urged Governments in the region to urgently press ahead with much-needed structural reforms, to ensure growth is sustained and inclusive.
It recommended that countries improve their infrastructure, invest in human capital, encourage more females in the labour force, increase oversight of the labour market, enhance governance and anti- corruption efforts, and take steps to further trade.