In light of the restrictive measures imposed since early March to contain the spread of the coronavirus such as the closure of the Guyana/Suriname border and the cessation of international flights, Guyana is expected to see a decline in economic growth, largely in the services sector. This was noted in the latest statistical abstract report of Central Bank.
The manager of Guyana’s economic wellbeing was keen to note that a number of businesses in the services sector, particularly, wholesale and retail trade, and transportation, will be affected and subsequently unemployment levels will increase. Central Bank also noted that the balance of payments deficit is projected to expand on account of declining export earnings, remittances and Foreign Direct Investments.
With respect to foreign exchange earnings, Bank of Guyana said that this will undoubtedly decrease, resulting in lower international reserves. It said too that the nation should brace for a reduction in central government’s revenues due to a contraction in business activities. The financial institution said that this, coupled with the expenditure government will have to spend to aid the fight and recovery of the coronavirus, will lead to a larger fiscal deficit.
As a consequence, Central Bank said that debt levels will rise as the government seeks to fill financing gaps. Be that as it may, the supervisory body said that the financial system is expected to remain sound due to measures taken in response to the pandemic. Similarly, the exchange rate is expected to remain relatively stable while the inflation rate will most likely continue to be low single-digits.