Even though the economy has shown a 4.5 percent improvement for the first half of 2018, when compared to the same period last year, it is still exposed to several risks.
This point was recently made by Finance Minister, Winston Jordan.
Jordan said that higher than expected levels of rainfall and the impact of climate change continue to threaten economic activity across several sectors within the economy which include sugar, rice, forestry, mining and construction. He said that this could constrain the overall growth performance for the year.
Further to this, Jordan said that the government had to increase expenditure for drainage and irrigation and the maintenance of several interior roads that service the mining and forestry industries.
He also pointed out that there was an improved performance in the Public Sector Investment Programme (PSIP). He said that the pace of implementation of the PSIP improved from 23.6 percent, on average, to 31.8 percent at the half-year, 2018. Jordon said that he is still mindful of what the performance will be for the remainder of the year since several constraining factors are “alive and well.”
In this regard, he pointed to the issue of inadequate leadership across several key sectors, which is further complicated by a limited pool of evaluators and qualified contractors; the absence of procurement planning; and the inability to attract qualified engineering and procurement specialists at the prevailing salaries.
The Finance Minister said that Cabinet is in the process of addressing the weak management across Budget Agencies.
Additionally, Jordan said that credit growth has accelerated in the second quarter of the year, driven by lending for business enterprises and real estate. He noted however that many financial institutions still have a high proportion of non-performing loans in their total loan portfolio. He said that this is a matter of concern for the Government.
Given the aforementioned, Jordan said, “The Finance Ministry has its work cut out for it. We are not out of the woods as yet. But I am confident that we will reach the 3.7 percent growth rate for 2018.”