In 2018, soaring fuel prices resulted in disastrous effects on the private sector earnings as it caused costs to skyrocket. This state of affairs continues to impact every aspect of the private sector operations, from manufacturing to distribution. At least this is the position of the Georgetown Chamber of Commerce and Industry (GCCI) as it shared its view on the recently presented 2019 national budget.
In registering its concern regarding fuel, the Chamber noted that it is “particularly disappointed that there has been no adjustment to the tax regime of fuel despite its suggestion.”
The GCCI, like other manufacturing and business oriented bodies, had met with Finance Minister, Winston Jordan, and had shared a number of recommendations, some of which were included in the budget.
But the GCCI is worried that some crucial recommendations were not adhered to.
GCCI has voiced concern about the macroeconomic dynamics of the fiscal sector where budget 2019 indicates the Government’s intention is to finance about 80 percent of the sizable fiscal deficit ($32.84B of the $41.49B) from borrowing from the domestic economy. Compounding this, GCCI noted, is that there is a projected increase in taxation by 9.9 percent in an economy which is projected to expand by 4.6 percent.
“This outstripping worries us,” said the GCCI which is also worried about the slow rate of implementation of the Public Sector Investment Programme (PSIP) and the long gestation period of capital expenditure. “This is likely to create a drag on the economy as money is withdrawn faster than it can be injected,” GCCI noted.
In the external sector, the large drawdown on the net foreign assets of the Bank of Guyana of US$104.1 million remains of concern to the GCCI in light of its recognition that its sustenance is critical to external viability and the preservation of macroeconomic stability of the country.
Job creation and consumer spending has also gained the attention of the GCCI. GCCI has noted that 2018 is expected to record marginal increases in labour intensive sectors such as agriculture and fisheries, with forestry expected to grow 1.1 percent.
Additionally, since it is expected that the mining and quarrying industries will record declines by the end of this year, GCCI noted that “given the dismal economic performance in these labour-intensive sectors, we are disappointed that the required stimulus needed to recover job losses were not adequately addressed in Budget 2019.”
Further, with a decline in spending in the agriculture sector from $19.4B to $17.1B (from 7.1 percent of the Budget to 5.7 percent of the total Budget), the Chamber believes that the dismal performance in the sector, unfortunately, is likely to continue and thus have a negative impact on consumer spending in 2019.
The $300.7 billion 2019 National Budget was presented on Monday by Finance Minister, Winston Jordan, under the theme, “Transforming the Economy, Empowering People, Building Sustainable Communities for Good Life”.