To the editor,
An apparent dispute regarding both price and income data produced by official reports purporting to measure Guyana's cost of living as reflected in the Consumer Price Index (CPI) and Nominal Gross Domestic Product (GDP). was there. A further complication arises because the World Bank has elevated Guyana from low-income status to high-income status using a measure called Gross National Income (GNI). The difference between GDP and GNI is that GDP is the sum of all income generated by people working in different sectors of a country's economy, as well as dividends, interest, and rental income generated within a country. Capital assets, machinery, buildings and rental real estate owned abroad by Guyanese residents as non-resident income are included in GDP as GNI.
Citizens are unable to track GNI economic status as a high-income country (HIC) due to a lack of local reporting detailing ownership of capital and real estate from which residents earn income abroad . Presumably, the World Bank is keeping the reclassified information secret.
“Guyana has one of the lowest GDP per capita in South America, but with tremendous economic growth since 2020, it has averaged 42.3% over the past three years, increasing GDP per capita from USD 6,477 in 2019 to 2022. Achieved over $18,199 ($1,517 per month)” ($540 per month). Real GDP is estimated to increase by 63.4% in 2022, driven primarily by the expansion of oil production as well as the strong growth of the non-oil economy. The development of the O&G sector has led to a significant increase in investment in infrastructure to support the growth of other industries. (See https://www.worldbank.org/en/country/guyana/overview).
Do civil servants and school teachers even earn the average GDP of $18,199 rather than additional non-resident income generated overseas? Is it this high income of certain segments of Guyana's population that is the cause of the IMF Managing Director's overheating concerns?
(See https://www.stabroeknews.com/2024/02/16/news/guyana/imf-deputy-managing-director-lauds-economic-expansion-here-sounds-cautionary-notes/).
The unmanageability of Guyana's monetary equivalent GDP and GNI is due to the lack of timely publications by the government agency legally responsible as the primary source of information, namely the Guyana Statistics Authority.
The Bank of Guyana, as a secondary source user of data passed to it by the bureau, reported a forecast inflation rate of 3.8% for 2023. Such low inflation rates do not imply that the economy will “overheat” in 2023. The Secretariat must measure and publish the country's cost of living index, the CPI index, independently of any national or international agency, for use by trade unions and management in contract negotiations. .
The CPI is an important figure for contracts that involve the use of both labor and capital in Guyana. It is also used as an integrity check in financial markets such as mortgage lending. Is the inflation rate measured in Guyana close to the 6.5 percent used for wage adjustment? It seems not. This number could be even higher, as people are seeing price increases much higher than 6-7 percent.
If the above 6.5 percent was used arbitrarily to adjust wages, then it is a predetermined number independent of the workings of Guyana's economy and misleads policymakers, including bankers in Washington. Very likely.
The Minister of Finance, in his 2024 Budget Speech, reported real economic growth in 2024 of 33%. If prices rise by he 6.5%, this means that nominal GDP in 2024 will increase by only 2.1%. This is misleading to trade unions and policy makers, as Guyana's national accounts observe double-digit export growth in the oil sector, alongside floating vessel imports and lease payments. . The only thing missing is data on the income generated from all non-resident assets owned by residents to increase Guyana's GNI. Similarly, official data on the CPI is missing or unreliable.
Sincerely,
Ganga Persad Ramdas, Ph.D., M.A., M.S.
