Guyana reviewing impact of external foreign exchange demands; economy to grow by additional 8%

Last Updated on Friday, 30 August 2024, 20:50 by Denis Chabrol

President Irfaan Ali on Friday announced that authorities were reviewing the impact of foreign exchange demands from neighbouring countries, even as he said Guyana’s economy grew by an estimated 49.7% in the first six months and is forecast to end the year with an additional percentage on its overall projection.

“An evaluation by a technical team is ongoing now to see the level of transfer on our banking system as our region and our partners face these challenges,” he said in his address to the opening of the newly-c0nstructed branch of Citizens Bank on Mandela Avenue.

Dr Ali did not name Suriname or Trinidad and Tobago, but it is well-known that those two sister Caribbean Community (CARICOM) member-nations are suffering from severe foreign exchange shortages, causing their businesses to buy US dollars here or pay for their imports through Guyana.

The President said earlier this year, the Bank of Guyana injected more than US$100 million into the local foreign exchange market, but today latest figures show that the total forex demand from the banking system was more than US$80 million. In June, 2024, the Central Bank had actually said the cash-injection was more than US$80 million.

Dr Ali also attributed the increased demand in foreign exchange to the pace and consequences of economic growth.

Giving a snapshot of Guyana’s mid-year economic performance that was made available on Friday, he said real economic growth was 49.7% which includes an “impressive” non-oil growth of 12.6%. As a result, he said Guyana’s revised economic growth for all of 2024 is 42.3% and the non-oil economy 11.8%. In the 2024 National Budget, government had forecast that real GDP for this year would have been 34.3% and the non-oil economy would have been 11.9%.

“Pushing this growth and supporting this growth heavily were almost all the sectors,” he said. The President said the sectors that faced difficulties earlier this year due to drought and other problems are expected to rebound in the second half of 2024.

Dr Ali said the construction sector grew by an estimated 43.7%.

The President also told attendees, who included top executives of Citizens Bank, Banks D’Aguiar’s Industries Holdings, Bank of Guyana, and representatives of companies that played a role in the construction of the new Citizens Bank branch, that in comparing 2000 to 2023, there was a 44% increase in credit to the private sector from GY$259.8 billion to GY$376.1 billion.

Chairman of Citizen’s Bank’s Board. Mr. Eton M. Chester said the new three-storey facility was constructed at a cost of GY$1.8 billion. A team of 27 persons would be employed there to deliver the bank’s products and services.