The Guyana Government has given assurances in its latest financial report that the price for goods and services is dropping. At the end of June 2023, the Ministry of Finance said the consumer price index declined by 0.3 percent when compared with the end-2022 position. This contraction the ministry said, reflects some reversion in the spikes observed last year, and can be attributed to lower food and energy prices.
More specifically, the ministry said declines were observed across multiple food categories, largely vegetables and vegetable products, and meat, fish and eggs, which fell by 6.9 percent, and 1.1 percent, respectively.
Furthermore, the ministry said the inflation rate in June 2023 was 1.9 percent, lower than the 5 percent recorded in June 2022. This lower rate was mainly due to slowing food prices, which accounted for 2.2 percentage points of the 12-month inflation rate, while the transport and communication category contributed -0.3 of a percentage point, supported by lower energy prices. Within the food category, meat, fish, and eggs contributed 1.2 percentage points, while vegetables and vegetable products contracted, accounting for -0.2 of a percentage point. Noteworthy, the June 2023 12-month inflation rate is in line with pre-pandemic levels. In June 2019, for example, the 12-month rate was 2.4 percent.
Like Guyana, the government said inflation rates are slowing elsewhere, as observed in the US in the first half of the year. Its mid-year report said, “While some other countries are still experiencing inflationary pressures, this is largely due to country-specific factors as global issues such as supply disruptions are easing, as well as COVID-19 being declared to no longer be a global health emergency in May 2023.”
With some level of uncertainty still clouding the outlook for 2023, government said it continues to be proactive to prevent persistent hikes like those observed last year. One example of this it said was the symposium held in July with several small, medium, and large-scale poultry farmers to address the challenges and highlight opportunities to foster a more efficient, sustainable, and competitive industry. Following the meeting, President, Dr. Irfaan Ali announced that commercial banks interest rate for loans to the poultry sector would be cut from eight percent to five percent, enabled by the removal of corporate income tax on income earned by these banks when giving loans to farmers in the poultry sector.
Guided by the inflation rates observed in the first half of the year, combined with continued efforts by Government to contain price increases, the end-of-year inflation forecast is projected to be maintained at 3.8 percent for 2023.
