The Guyanese economy continued to expand robustly in 2013, growing by 5.2 per cent owing to the strong performance of key commodity sectors such as gold, rice and the construction sector, fuelled by public investment in infrastructure. The gold industry, the main driver of the economy in recent years, continued to perform well, achieving a record high output, which compensated for the fall in world market price. On the other hand, the sugar sector could not emerge from its difficult years of low production. The Government has sought to further boost the economy by making investments in physical infrastructure, ICT and the power supply system, and by helping the key mining and agricultural industries to implement recapitalization and an upgrade of their facilities. Several infrastructure projects are expected to be supported by foreign governments and multilateral donors in 2014. The record level of government expenditure was also reflected in an increase in wages of public sector employees. While government revenue increased due to the expansion of economic activities, it was not sufficient to offset the expenditure, and the Government ran a fiscal deficit which was financed by new borrowings from domestic and foreign sources.
The Government has had difficulties in implementing its policy agenda since the opposition gained a majority in the parliament in 2011. After the 2013 budget speech, the opposition succeeded in cutting the budget before it was finally approved by the parliament. The Government’s key policies that have been affected as a result of this include the Low Carbon Development Strategy (LCDS) as well as projects involving capital expenditure. The monetary policy of the Central Bank has accommodated growth with a marginal increase in the money supply and stable interest rates, which contributed to a modest rate of inflation of 0.9 per cent at the end of the year and marginal depreciation of the currency. Although the trade deficit contracted, the current account deficit increased in 2013 due to a decline in remittances from abroad. There was an overall balance of payments deficit as the capital account surplus weakened because of a decline in FDI inflows.
The economy is expected to continue to grow robustly in 2014. The mining sector and rice industry will remain the principal drivers of growth. Preliminary information suggests a slightly better performance of the sugar sector in the first quarter of the year, but it will take several years for the sector to be fully recapitalized and mechanized. The growth rate in 2014 is estimated to be around 4.5 per cent with, downside risks being a fall in commodity prices and a change in the political climate which is adverse to investors. (Economic Survey of the Caribbean 2014)