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The Ministry of Finance in a statement issued yesterday announced Guyana has recorded 49.7 per cent economic growth in the first half of 2024. Guyana’s wealth and growth continue to show positive indicators, yet the quality of life for the average Guyanese is on the decline as evident by high cost of living, low wages/salaries, high unemployment and underemployment.
Services like education and health in Guyana continue to lag behind other Caribbean and Latin American (LAC) countries as announced in a World Bank Report. Touching on education, the Bank stated that “although the average Guyanese student is expected to complete 12.2 years of schooling, this is equivalent to only 6.8 years of learning when expressed in terms of Learning-Adjusted Years of Schooling (LAYS).” Health outcomes in Guyana also remain below the average for LAC and upper middle-income countries.
The World Bank has said approximately 48 per cent of the population is poor, living on less than US$5.50 per day, which is equivalent to GY$1200.00. According to the Bank this is the “highest in the Latin America and Caribbean region.”
Stabroek News in its “How the Cost of Living is affecting people” series, has fanned out across the country, interviewing a wide cross section of citizens, and reporting their stories of on-going hardship. Last month a 57-year-old female told Stabroek News she is just trying to cope with the cost of living.
She cited: “For example, the cost for a pound of chicken a couple month ago was $300 and something; now the chicken cost $400/$500 a pound at some places. All like bread, the cost gone up. A few months ago, a Palms wholewheat bread cost $320; now the bread cost $380/$400. The next thing is the transportation cost over here is expensive. In the afternoon to travel back from Georgetown to Goed Fortuin I will pay $300; the normal cost is $200.Sometimes in the afternoon instead of me paying $100 from Vreed-en-Hoop to Goed Fortuin, I end up paying $200”
Gross Domestic Product vs Human Development Index
Asked to comment on the Finance Ministry’s statement, General Secretary of the Guyana Trades Union Congress, Lincoln Lewis said economic growth does not necessarily translate to poverty reduction.
The veteran trade unionist said the growth the government is talking about reflects the Gross Domestic Product (GDP), whilst poverty reduction is measured by using the Human Development Index (HDI) as prescribed by the United Nations (UN).
According to the UN, “the HDI was created to emphasise that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone.”
Some of the indices measured are longevity, access to quality education and health care, housing, potable water, public transportation, proper waste management disposal, decent wages/salary.
While the Government ignores using HDI measurements, it touts GDP four consecutive years of economic growth. In critiquing the growth, Lewis said “that growth and wealth are reflected within a very small group while the masses are wallowing in poverty.”
Guyana is a wealthy country but the Government’s top-down approach to development has not trickled down to the masses.
Consumers price
The government said consumer prices rose by 1.6 percent at the end of June, 2024 when compared with the end-2023 position, reflecting higher food prices, specifically fruits and fruit products, vegetables and vegetable products and cereals and cereal products. According to the government the 12-month inflation rate stood at 4 percent at the end of June and is now projected to be 3.2 percent for 2024. But this data is highly given the secrecy how data is gathered, manipulated and not shared.
Another citizen, a pensioner, told Stabroek News “a couple months ago a bundle eschalot cost $200/$500 in the market; now a bundle of eschalot cost $1,000. Also, a couple months back a pound of celery cost $1,500; now a pound of celery cost $3,000. The government should look into the poorer class of people and help them. “
Guyana’s 2024 Budget is $1,146 Trillion. In July the government returned to the National Assembly for Supplemental Funding of more than $40 Billion. In 2024 Guyana is expected to earn no less than US$2.8 Billion in oil and gas revenue. According to the International Financial Institutions, Guyana is the world’s fastest growing economy and the richest per capita. Guyana’s population is approximately 780,000.
Key Macroeconomic highlights
The key macroeconomic highlights in the Mid-Year Report for 2024 are as follows:
ECONOMIC GROWTH
- Overall real GDP grew by an estimated 49.7 percent in the first half of 2024.
- The non-oil economy grew by an estimated 12.6 percent in the first half of the year, representing the fourth successive year of expansion in the non-oil economy at the half-year, following the contraction in 2020.
- The revised full-year forecast for real GDP growth in 2024 is now 42.3 percent overall and 11.8 percent for non-oil real GDP.
SECTORAL PERFORMANCE
Agriculture, Forestry and Fishing
The agriculture, forestry and fishing industries expanded by an estimated 8.7 percent in the first half of the year:
- The rice industry grew by an estimated 17.9 percent in the first half of the year and is now expected to grow by 8.9 percent for the entire year.
- The other crops subsector is estimated to have grown by 8.8 percent in the first half, with a revised growth projection of 12.7 percent for the entire year.
- The forestry industry is estimated to have grown by 13.2 percent in the first half, and growth is expected to remain unchanged at 3.9 percent for the year.
- The fishing industry is estimated to have expanded by 27.7 percent in the first half and is expected to grow by 16.8 percent for the entire year.
Extractive Industries
The mining and quarrying sector is estimated to have grown by 64.3 percent in the first half of the year, driven by growth in the petroleum and “other mining” industries.
- The petroleum subsector grew by 67.1 percent, with 113.5 million barrels of oil produced in the first six months of this year. The industry is now projected to grow by 56.4 percent for the entire year.
- The other mining and quarrying industry comprising sand, stone, diamonds and manganese, is estimated to have grown by 45.5 percent in the first half, driven by greater activity in the construction sector. This industry is now projected to grow by 24.7 percent in 2024.
Manufacturing, Services and Construction
- The manufacturing sector is estimated to have grown by 27.5 percent in the first half, largely driven by increases in “other manufacturing” and rice manufacturing. The sector is now projected to grow by 14.5 percent this year.
- The services sector is estimated to have expanded by 7.3 percent, driven largely by growth in financial and insurance activities and professional, scientific and technical services. The overall 2024 growth rate for services is now 7.7 percent.
- The construction sector is estimated to have grown by 43.7 percent in the first half of 2024 and continues to be driven by both the Public Sector Investment Programme (PSIP) and intensified private investments. The sector is now expected to grow by 27.2 percent in 2024.
BALANCE OF PAYMENTS
The current account recorded a surplus of US$3,199.9 million, while the capital account registered a deficit of US$3,395.4 million. As a result, the overall balance of payments recorded a deficit of US$184.6 million at the end of the first half of 2024.
Total export earnings grew by 68.7 percent to US$10,221.9 million at the end of June 2024, largely on account of higher earnings from crude oil exports, which amounted to US$9,401.6 million in the first half. Non-oil export earnings increased by 23.4 percent in the first half of this year. Earnings from rice and gold expanded by US$24.7 million, and US$12.2 million, respectively, with the latter reflecting favourable price developments.
Total import payments declined over the review period to US$3,245.1 million, largely attributed to the reduction in the importation of capital goods, as no new FPSO was imported.
MONETARY DEVELOPMENTS
Domestic Credit
At the end of the first half of 2024, net domestic credit stood at $773.1 billion, 20.3 percent higher than the level at end of 2023. Total credit to the private sector grew by 9 percent from $376.1 billion at the end of December 2023, to $410 billion at the end of June 2024.
Credit to households rose by 6.8 percent to $41 billion, with notable growth of 11.6 percent observed in lending for motor cars.
Within credit to business enterprises, there was notable growth in lending for services, agriculture, and mining and quarrying, of 11.5 percent, 12.3 percent, and 29.3 percent to $148.5 billion, $24.6 billion, and $6.9 billion, respectively.
Real estate mortgages expanded by 9 percent to $140.2 billion, driven by increases in mortgages granted for private dwellings and industrial and commercial properties.
View the entire 2024 Mid-Year Report here: https://finance.gov.gy/wp-content/uploads/2024/08/Mid-Year-Report-2024.pdf
