The world financial crisis will have major implications for counties like Guyana but these impacts will not be felt here in the immediate future.
Yesterday, President Bharrat Jagdeo said that while he is not afraid of any immediate impact on the country’s financial sector, he is more concerned about the blow this crisis may have on the rest of Guyana’s economy.Once credit ‘dries up’ around the world, he noted yesterday, local investment companies can be delayed in terms of acquiring capital for their projects.
The Head of State told the media yesterday that once the world’s economies shrink there will be a reduction in global demand.Already on the stock market, the price for commodities such as oil, metal and wood products are falling steeply.As such, he added, there will be fall in price for the commodities that Guyana exports and a shrink in global demand for those commodities.
Investment flows and remittances could be affected to some extent while the cost of capital will go up for anyone who wants to borrow for any purpose abroad, the Head of State pointed out.
On the positive side, President Jagdeo said that fortunately Guyana has a provincial type of banking system; the local businesses are not heavily integrated into the world’s capital, money or bonds markets.“We are isolated from the impact…if our banks were investing large sums of money in these markets they would have been affected.”