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Georgetown, Guyana (Credible Sources) Inflation and economic overheating are threatening Guyana’s economic stability, former Finance Minister Winston Jordan warned during a December 8, 2024 appearance on Countdown with Andrew Weekes and Onix Duncan. He accused the government of fueling inflation through unchecked spending and overly ambitious infrastructure projects, creating an unsustainable strain on the economy.
Jordan highlighted the massive demands placed on resources such as labor, materials, and machinery, all of which are exacerbating inflation. “The government has taken on an infrastructure program that is placing huge demands,” he said, pointing to rising costs in the construction sector as evidence. He noted that building a house that cost $10 million a year ago now costs $15 million. According to Jordan, the overheated economy is the result of an imbalance between demand and supply, driving up prices and affecting everyday Guyanese.
In addition to infrastructure spending, Jordan criticized the government’s decision to inject $30 billion into the economy before the end of the year, warning that this move could worsen inflation. He described the situation as a lack of fiscal discipline, stating, “You are already in an inflationary situation, and then you pump billions into the economy—it’s like pouring gasoline on a fire.”
The Bank of Guyana’s 2024 Half-Year Report offered a more restrained perspective, indicating moderate inflation. The report showed that the Urban Consumer Price Index (CPI) had increased by 1.6% year-to-date, driven largely by a 3.2% rise in food prices. It forecasted a year-end inflation rate of 3.2%, suggesting that inflationary pressures would remain manageable for the rest of the year. While these figures present a controlled outlook, Jordan’s observations point to growing disparities between statistical projections and the lived reality of citizens.
Jordan also raised concerns about the government’s borrowing practices, claiming that 25% of the budget deficit is financed through loans. This dependency, he argued, places an enormous financial burden not only on future generations but also on the current population. He described the borrowing as symptomatic of broader mismanagement, which he believes has left the economy ill-equipped to handle external shocks or long-term challenges.
His analysis raises critical questions about Guyana’s economic strategy and the management of its oil wealth. Jordan called for immediate action to slow the pace of infrastructure development, reduce government expenditures, and prioritize fiscal discipline. His warnings come at a time when the country is grappling with rising expectations for how its newfound oil resources will transform the economy.
The government has yet to respond directly to Jordan’s critical analysis, but the divergence between his warnings and the Bank of Guyana’s more optimistic forecasts underscores the debate over the country’s economic trajectory. With inflationary pressures mounting and concerns about sustainability growing, the choices made in the coming months could have profound implications for Guyana’s economic future.
