Country Report Guyana October 2008

Outlook for 2009-10

The People’s Progressive Party-Civic (PPP-Civic) government has a clear mandate and will serve a full five-year parliamentary term to 2011, continuing its pragmatic development policies and introducing some economic and administrative reforms. The US will maintain pressure over issues of concern, including narcotics and human rights. Economic policy will continue to be shaped by a poverty reduction strategy paper (PRSP) agreed with international financial institutions. Economic growth will moderate in 2009-10, but will remain high on a historical comparison basis. The outlook is positive for the sugar, rice and mining industries. The current-account deficit will remain large as a percentage of GDP over the forecast period, reflecting major public- and private-sector investment projects, but should narrow gradually as projects approach completion.

The political scene

The president, Bharrat Jagdeo, remains popular among members of his party. Although there has been some speculation that the PPP could attempt to amend the constitution to allow Mr Jagdeo to run for a third term, no formal dialogue has been launched with the opposition People's National Congress-Reform (PNC-R), whose support would be required to make any constitutional amendment. Tense inter-party relations in parliament continue to hinder the passage of key ant-crime initiatives. Two of Guyana's most notorious criminals were killed by police on August 28th.

Economic policy

Guyana rejected the full Economic Partnership Agreement (EPA) with the EU in September, but agreed to sign the sections of the agreement concerning trade in goods. Guyana could lose lucrative trade benefits with the EU if it does not sign the pact by the end of October. With the exception of Haiti, all of the other Cariforum countries (the Caribbean Community, or Caricom, plus the Dominican Republic) agreed to sign the full agreement.

The domestic economy

Without specifying figures, the Bank of Guyana (the central bank) estimated modest real GDP growth in the first quarter of 2008. The central bank projects full-year growth of 4.8%, whereas the Economist Intelligence Unit is slightly more conservative, with an estimate of 4.6%. Consumer price inflation moderated for the third consecutive month in June, falling from 11.5% in March to 7.4% in June.