GEORGETOWN, Guyana, CMC – An International Monetary Fund (IMF) mission that concluded a two-week visit here on Monday is” firmly” supporting the efforts of the authorities to improve the business climate and labor shortages in Guyana.
The mission, headed by senior economist Alina Carare, said the authorities’ efforts to improve the business climate and address labor shortages. The rules are preparing and implementing a range of reforms designed to increase the economy’s digitalization and boost labor and total factor productivity, such as single window processing of permits, digital ID, and digital banking records.
The mission, which carried out the annual Article IV in the context of a request to use IMF resources, said that Guyana is moving to increase its electricity supply through a diversified energy matrix, improve its reliability, and decrease its cost.
“The authorities are also making sustained efforts to address labor shortages through providing vocational training facilities, online training resources, and incentives to set up businesses outside the capital.”
The mission has also welcomed the authorities’ efforts to modernize official statistics, which the IMF supports through capacity development.
The Caribbean Regional Technical Assistance Centre (CARTAC) is supporting the authorities’ efforts to rebase gross domestic product (GDP) and consumer price index (CPI), and the IMF said it stands ready to provide additional capacity development assistance, including with the development of capital markets and other pressing areas.
The mission said Guyana’s commitment to fiscal discipline is welcome and allows for a balanced growth path.
It said over the medium term, moderating fiscal impulses are projected to achieve a zero overall budgetary balance by 2028.
“This will allow for an economic expansion – real GDP growth on average of 20 percent per year during 2024-28) – without creating macroeconomic imbalances. Public investment is expected to be financed primarily by oil revenues in the medium term.”
The mission noted that public sector debt is projected to decline gradually as a share of GDP over the medium term after falling to 26 percent at the end of 2022 from 43.2 percent of GDP in 2021.
It said the real exchange rate is expected to appreciate and inflation to increase as the economy closes its development gap. Gross international reserves, excluding the National Resource Fund, are expected to accumulate, with reserve coverage indicators strengthening.
“At the same time, substantial savings will accumulate offshore in the medium term in the Natural Resource Fund (NRF),” the mission said.
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