Even with citizens complaining almost daily about the steep rise in the cost of living, President Irfaan Ali has indicated that the impact of the cost of living on citizens has been cushioned by his government’s deliberate policies and measures.

During a live Facebook presentation on Friday night, the President said the steep rise in the cost of living, which includes price increases of food has not escaped the attention of regional leaders or the Government of Guyana.

The President explained that since 2020, the Government has introduced a number of policies and measures that have cushioned the global rise in food prices. 

“In Guyana, as you are aware, our government has taken a lot of initiatives to combat cost of living, to combat these inflated prices, the inflation that we are importing, so as to have a situation, where the transferred prices are not transferred in its totality to the consumer. Because the government’s initiatives and policies are providing that cushion, providing that stability,” President Ali said. 

The global rise in cost of living has been linked to the COVID-19 pandemic, which disrupted food production, along with transportation and logistics. 

 In response to the global pandemic, Governments introduced a number of fiscal measures including stimulus packages, interest rate cuts, and direct financial support to individuals and businesses.

However, President Ali explained that the measures resulted in aggregate demand, which outstripped aggregate supply in most countries leading to inflationary pressures. 

The Russian-Ukraine War has also resulted in a rise in the cost of energy, labour and transportation, he explained.  

Citing an article by Global Finance, President Ali said inflation spiked in 179 out of 194 countries two years ago, with developed countries, such as the US and UK, recording inflation rates that reached a 40-year high in 2022. 

In Latin America and the Caribbean, some of its largest economies recorded inflation rates that reached a 15 year high in 2022.

 President Ali said similarly, international food prices rose sharply in 2021 and 2022.

“When you look at our figures, when you look at the inflation rate for Guyana, compared to all of these regions, it is just remarkable, the way we have been able to manage our economy, the way we have been able to cushion this cost, and the way in which, we implemented measures that targeted directly and indirectly, first the increase in production, two to disallow the transfer of inflated prices to the consumer, and fourthly, to ensure that the most vulnerable in our society were protected,” President Ali said. 

It was noted too that in 2021, the government restored zero-rated status to all food items and other basic household necessities, such as wheaten flour, basic breads, oats, unflavoured cracker biscuits, and cooking oil to reduce food inflation further. 

“VAT on Machinery – Removed VAT on machinery and equipment used by farmers in the agriculture sector – this is to advance mechanization, increase productivity and to reduce cost of production. We established a broiler breeder facility, so that we can have more, instead of having the full effect of the imported inflation on hatching eggs, we are now developing the capacity and capability to produce our hatching eggs here in Guyana, so we will save that foreign currency, and reduce that imported inflation also,” he added. 

President Ali said coupled with money policies that have resulted in credit to the agriculture sector increase from $122B in 2019 to $219B by 2023, the measures have resulted a significant boost in food production. 

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