{
  "title": "Press Release: IMF Approves Three-Year Arrangement Under the ESAF for Guyana",
  "publication": "IMF News, July 15, 1998",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9829",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9829",
  "overlayPath": "/en/news/articles/2015/09/14/01/49/pr9829/index.md",
  "summary": "The IMF approved a three-year loan under the Enhanced Structural Adjustment Facility (ESAF) equivalent to SDR 53.76 million (about US$71 million) to support Guyana’s economic program for 1998–2001.",
  "publishDate": "1998-07-15",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The IMF approved a three-year loan under the Enhanced Structural Adjustment Facility (ESAF) equivalent to SDR 53.76 million (about US$71 million) to support Guyana’s economic program for 1998–2001.\n- The first annual loan is SDR 17.92 million (about US$24 million), available in two equal semiannual installments, the first of them shortly."
    },
    {
      "heading": "Background and recent performance",
      "content": "- Liberalization, privatization, structural reforms, and financial system strengthening achieved important progress in recent years.\n- Economic outcomes 1991–96:\n  - Average real GDP growth of 7 percent a year during 1991–96.\n  - Inflation decline from about 100 percent in 1991 to 4½ percent in 1996.\n  - Relatively stable exchange rate and strengthened balance of payments and international reserves.\n- 1997 setback:\n  - Economic performance faltered in 1997 due to political disturbances surrounding the December elections, adverse effects of the El Niño weather phenomenon on agriculture, and deterioration in external terms of trade.\n- In December 1997 the IMF Executive Board determined Guyana qualified for assistance under the Initiative for Heavily Indebted Poor Countries (HIPC)."
    },
    {
      "heading": "Medium-term strategy and the 1998–99 program",
      "content": "- Program objectives for 1998–2001:\n  - Achieve average real GDP growth of about 4 percent a year.\n  - Reduce inflation to about 3.6 percent (period average).\n  - Narrow the external current account deficit while maintaining gross international reserves at the equivalent of 4–5 months of imports.\n- Main program elements:\n  - Reduction in the fiscal deficit.\n  - Tightening of credit policy.\n  - More flexible exchange rate policy.\n  - Continuation of structural reforms.\n- 1998–99 specific assumptions and targets:\n  - Correct the 1997 growth slippage; assume slowdown in real GDP growth to about 3 percent in 1998 reflecting slow recovery in agricultural output.\n  - Period-average inflation of about 4.6 percent in 1998.\n  - Strengthen external position with accumulation of gross international reserves to maintain import cover at about 4½ months.\n- Fiscal measures to achieve objectives:\n  - Reduce overall public sector deficit from about 9 percent of GDP in 1997 to 2 percent of GDP in 1998.\n  - New revenue measures: sharp upward adjustment of fees and charges for government services; increase in taxes on tobacco and related products; strengthening tax administration.\n  - Central government expenditure reduced by 1½ percent of GDP through lower interest payments and cuts in capital expenditures in nonpriority areas.\n  - Credit policy remains restrained, consistent with inflation and balance of payments objectives."
    },
    {
      "heading": "Structural reforms",
      "content": "- Focus: reduce the role of the public sector and create an environment conducive to private sector development.\n- 1998–99 priorities:\n  - Financial sector reform and improving the business environment.\n  - Restructuring public enterprises.\n  - Civil service reform.\n- Financial sector reforms include:\n  - Modernization of central bank operations — including reorganization, recapitalization, and increased autonomy — to improve capacity for monetary management.\n- Civil service reform emphasis:\n  - Rationalization and improvement of the remuneration structure to attract and retain skilled personnel."
    },
    {
      "heading": "Addressing social needs",
      "content": "- The authorities emphasize maintaining appropriate social and environmental policies.\n- Social objectives and measures:\n  - Improve standards of living through increased emphasis on health and education and well-targeted poverty-reduction programs.\n  - Reforms developed with assistance from international financial institutions and other donors to raise enrollment rates in primary education.\n  - Reinvigorate primary health care through greater awareness campaigns and increased provision of essential drugs to low-income groups.\n  - Management of natural resources and improvement of urban areas are major concerns."
    },
    {
      "heading": "The challenge ahead",
      "content": "- Remaining priorities:\n  - Further strengthen general administration of the central government.\n  - Increase public sector efficiency in service delivery.\n  - Expand social sector infrastructure to strengthen the foundation for lasting progress."
    },
    {
      "heading": "IMF relationship and financing position",
      "content": "- Guyana joined the IMF on September 26, 1966.\n- Guyana’s quota is SDR 67.2 million (about US$89 million).\n- Outstanding use of IMF financing currently totals SDR 30 million (about US$39 million)."
    },
    {
      "heading": "Guyana: Selected Economic Indicators",
      "content": "- Real GDP (percent change)\n  - 1996: 7.9\n  - 1997: 6.2\n  - 1998: 3.1\n  - 1999: 4.4\n  - 2000: 4.2\n  - 2001: 4.9\n- Consumer prices (period average)\n  - 1996: 7.1\n  - 1997: 3.6\n  - 1998: 4.6\n  - 1999: 4.5\n  - 2000: 4.0\n  - 2001: 3.5\n- Overall fiscal balance (deficit -) (percent of GDP)\n  - 1996: -3.2\n  - 1997: -8.8\n  - 1998: -2.0\n  - 1999: -0.8\n  - 2000: -0.1\n  - 2001: 1.3\n- External current account balance, excluding official transfers (deficit -) (percent of GDP)\n  - 1996: -9.3\n  - 1997: -14.5\n  - 1998: -10.7\n  - 1999: -10.4\n  - 2000: -9.1\n- Gross official reserves (months of imports)\n  - 1996: 5.2\n  - 1997: 4.7\n  - 1998: 5.0\n\nEstimates.  \nProjections.  \nSources: Guyana authorities; and IMF staff estimates and projections.\n\nPress Release No. 98/29, July 15, 1998 — International Monetary Fund.\n\n---\n\n\n References\n\n- Guyana and the IMF\n- Press Releases\n- PRESS CENTER\n- see Press Release No. 97/64\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9829"
    }
  ],
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    "Published: July 15, 1998",
    "The IMF approved a three-year loan under the Enhanced Structural Adjustment Facility (ESAF) equivalent to SDR 53.76 million (about US$71 million) to support Guyana’s economic program for 1998–2001.",
    "The first annual loan is SDR 17.92 million (about US$24 million), available in two equal semiannual installments, the first of them shortly.",
    "Liberalization, privatization, structural reforms, and financial system strengthening achieved important progress in recent years.",
    "Economic outcomes 1991–96:",
    "1997 setback:",
    "In December 1997 the IMF Executive Board determined Guyana qualified for assistance under the Initiative for Heavily Indebted Poor Countries (HIPC).",
    "Program objectives for 1998–2001:",
    "Main program elements:",
    "1998–99 specific assumptions and targets:",
    "Fiscal measures to achieve objectives:",
    "Focus: reduce the role of the public sector and create an environment conducive to private sector development.",
    "1998–99 priorities:",
    "Financial sector reforms include:",
    "Civil service reform emphasis:",
    "The authorities emphasize maintaining appropriate social and environmental policies.",
    "Social objectives and measures:",
    "Remaining priorities:",
    "Guyana joined the IMF on September 26, 1966.",
    "Guyana’s quota is SDR 67.2 million (about US$89 million).",
    "Outstanding use of IMF financing currently totals SDR 30 million (about US$39 million).",
    "Real GDP (percent change)",
    "Consumer prices (period average)",
    "Overall fiscal balance (deficit -) (percent of GDP)",
    "External current account balance, excluding official transfers (deficit -) (percent of GDP)",
    "Gross official reserves (months of imports)",
    "[Guyana and the IMF](http://www.imf.org/external/country/GUY/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[see Press Release No. 97/64](https://www.imf.org/external/np/sec/pr/1997/pr9764.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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