Poor economic performance, increased prices for food, clothing and medicines- PPP’s Irfaan Ali

Last Updated on Monday, 3 December 2018, 13:24 by Denis Chabrol

Opposition Shadow Minister of Finance, Irfaan Ali on Monday kicked off debate on the 2019 National Budget, saying that Guyanese are being burdened with more taxes and reduced foreign exchange earnings due to poor performance of the traditional exports.

“These are the realities of the economy and that the Honourable Minister of Finance skillfully maneuvered out of his speech,” Ali told the House.

At the same time, he said Guyanese would be taxed more in 2019 although government employees would earn a maximum of 7 percent increase in wages and salaries retroactive to January 1, 2018. Tax revenue, he said, would grow by GYD$21.5 billion in 2019 and when compared to 2014, it would be GYD$96.3 billion more.

He said Guyanese are expected to spend 4.6 more on food, 4.3 percent on clothing and 4 percent on medical and personal care, causing people to find another 14 percent “out of their earnings to meet these basic expenditures”.

Turning to non-performing loans, the opposition People’s Progressive Party’s Shadow Finance Minister said return on equity by the six major commercial banks declined from 22.3 percent in 2014 to 2.3 percent in 2018.  Actual figures, he said, shows non-performing loans increased by GYD$11 billion or 58 percent more than in 2014.

“This is the reality. these are the facts when it comes to the performance of our economy,” said Ally, a former official of the Ministry of Finance.

He said Guyana was projected to lose US$463 million in foreign exchange by the end of this year. He explained that more than US$120 million would be lost to due to “severe under-performance” of sugar, rice and forestry sectors in 2018. For next year, he said the loss is expected to be US$84.5 million less than compared to 2014.

Sugar production in 2017, he said, was 57 percent less than in 2014, putting it at US$39.5 million or GYD$8.3 billion less than four years. Export revenue for rice and bauxite, Ali added, contracted by US$48.5 million and US$17.6 million less than 2014 figure. Timber production fell by 9 percent and diamond by 47.9 percent, he said.

Ali used 2014, the last full year it was in office before losing power in May 2015, as the base year for his calculations.

In terms of net foreign reserves, he said it is projected to decline to US$388 million by this year end, about  US$260 million or 40 percent less than what the coalition A Partnership for National Unity+ Alliance For Change (APNU+AFC) government inherited in 2014.

In terms of Balance of Payments as reported by the Bank of Guyana, he said that was 11.2 billion Guyana dollars for 2016 and 14.6 billion Guyana dollars for 2017.

Minister of Finance, Winston Jordan last week presented a more than GYD$300 billion budget.