The World Bank has voiced support for further cash transfers by the Government as a sustainable way to cushion the impacts of inflation in Guyana.
The World Bank Group today launched a new report focused on New Approaches to closing the fiscal gap where World Bank Latin America and the Caribbean Chief Economist William Maloney presented the Regional Economic Review.
Speaking at the event, Maloney reflected on the impact of covid-19 and the Russia-Ukraine war on the fiscal growth and economic stability of the Latin American and Caribbean Region.
He stated that the Caribbean Region was hardest hit by the pandemic, with GDP still not back to 2019 levels. Potential reasons for this, he stated, may be in large part due to the Caribbean’s dependence on the tourism sector.
For Guyana in particular, he commended “astronomically high rates of growth” despite the pandemic and inflation, with 57.8% projected for this year and 25.2% next year. These extraordinary growth rates, Maloney said, are reflective of the impacts of the new oil sector.
“Any government would have a challenge in managing those resource flows to ensure you don’t set off inflation within the country and the Central Bank will need to take measures to control that.”
Maloney further said that the World Bank supports cash payouts by Guyana’s Government per household moving forward.
“As far as how to mitigate the impact on families, the bank has generally supported transfers to households to offset rising fuel and food costs as a more efficient way of supporting poor families than blanket subsidies.”
A world bank report in 2021 revealed that households in Guyana received far more social transfers, particularly in the form of cash, than several other Caribbean countries.
Social transfers (or social benefits) are any forms of assistance provided to ease financial burdens.
Some relief provided by the Government since the onset of the pandemic includes; one-off grants for old age pensioners and public assistance recipients, electricity credits for some households, ‘Because we care’ education grants and flood relief.