Reports of cost of living doubling misleading – Finance Minister

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Finance Minister Dr Ashni Singh

 

Senior Minister with Responsibility for Finance, Dr Ashni Singh has rubbished reports by a local newspaper that the cost of living in Guyana will double by the end of this year, saying that the article is not only inaccurate but also a misrepresentation of the Bank of Guyana’s report.

Citing a Bank of Guyana Quarterly Report, Kaieteur News on Thursday last reported that the cost of living in Guyana is “expected to more than double” by the end of 2022. They premised this assertion on the fact that it was reported that the inflation rate in Guyana is projected to increase to 4.1 per cent by the end of the year from the 1.7 per cent recorded at the end of March.

But Minister Singh has labelled the article as spurious.

“Either they have the same arithmetic challenge that the APNU/AFC has, that is, they count or do not know numbers or they are intent on misrepresenting the facts because the Bank of Guyana Quarterly Annual Report did not say that there is going to be a doubling of cost of living. The Bank of Guyana report simply reported what first-quarter inflation is going to be and presented an updated outlook… based on what was projected in the [2022] Budget,” he told this publication on the sidelines of an event recently.

According to the Finance Minister, this forecasted increase in the inflation rate cannot possibly mean that cost of living will double.

“A report that says you have 1.7 per cent inflation in the first quarter and said that the Budget projects 4.1 per cent inflation for the whole year simply means that prices would increase by 4.1 per cent. For cost of living to double, prices have to increase by 100 per cent. So, a doubling of the inflation rate from 1.7 to 4.1 cannot possibly constitute a doubling of the cost of living.”

“To report that that means that cost of living would double can only translate to an intent to deceive. And so that headline was completely inaccurate, misleading, and downright mischievous, and does not reflect what was said in the quarterly report issued by the Bank of Guyana… So, that headline was crafted by a completely mischievous individual or a person who is numerically illiterate,” the Minister contended.

In fact, this similar point was also driven home by Chief Statistician of the Bureau of Statistics, Errol La Cruez, who has debunked the report.

“Note that inflation is the general increase in prices and the inflation rate is reported in percentages. That is to say inflation of two per cent means prices increased by two per cent and inflation of four per cent means prices increased by four per cent,” La Cruez said in a social media post on Sunday.

He added, “In other words, if something cost $100 last year and it had inflation of two per cent this means it now costs $102 and if there is inflation of four per cent then it would cost $104. Which is just four dollars more than the $100 price last year and two dollars more than the $102 price earlier this year.”

The Chief Statistician noted that even in the reports which claim that cost of living will double this year, the reports also reference an article that inflation will increase from 2 per cent earlier this year to 4 per cent by year-end.

“Which, to be abundantly clear, is absolutely wrong! How is it that prices moving from $102 to $104 (represent) a doubling of prices/cost of living? I want to believe that this is a case of trying to sensationalise and perhaps deliberately mislead people,” he said.

Back in May, President Dr Irfaan Ali had announced a series of ground-breaking measures, ranging from cash grants to households in hinterland and riverine communities to the provision of free fertilisers for farmers, which are aimed at improving the lives of citizens.

The first initiative he had announced was the distribution of a one-off $25,000 cash grant to every household in the riverine and hinterland communities of the country. This measure, according to Ali, will result in $800 million being pumped into the economy and will cushion the impacts of the rising cost of living.

He had also announced fertiliser support to farmers in order to cushion the impact of the rising cost of fertiliser on farmers and to limit the trickle-down effect on food prices, by the Government purchasing 1 billion dollars’ worth of fertiliser for free distribution to farmers.

The third measure announced by the Government is the setting up a special unit to help landowners of both private and Government-owned lots build their houses.

President Ali said the unit will support applicants with the process of applying to banks for financing and with the initial phase of construction by releasing the necessary resources. Persons will also have the option of choosing $7 million, $9 million, or $12 million house models, for the Government to help them build.

Since taking office in 2020, the Ali-led Administration has introduced several measures to put more disposable income in the pockets of Guyanese. From the onset, VAT was removed from water and electricity. There has also been an increase in old-age pension and public assistance, putting $2.3 billion and $432 million, respectively, into the pockets of Guyanese.

Nevertheless, Minister Singh has further reassured Guyanese that the PPP/C Government will continue to monitor the situation and make interventions as required.

“I don’t want to be specific about what those future interventions are but I do want to assure the Guyanese people that the Government continues to be extremely mindful of the realities globally and the realities domestically… and will do all that we can to alleviate the situation,” he posited.
In fact, the Government had allocated some $5 billion in the 2022 Budget to cushion the effects of the rising cost of living.

According to the Finance Minister, these monies have not been exhausted. Portions have so far been used to fund interventions such as fertiliser support and the riverine and hinterland household grant.

While he could not provide an exact amount as to how much was spent thus far at the time when he was speaking to reporters on the sidelines of an event recently, Dr Singh explained that Government will ascertain how the remaining money will be utilised as the needs arise.