The government is projecting for the economy to grow by two per cent this year, after recording 1.9% growth last year.

Finance Minister, Saisnarine Kowlessar, says he anticipates the increase in overall price levels or inflation to be five per cent this year, compared with 2.6% last year.

The growth, he said, would come from the continuation of the recovery in the productive sectors. Sugar production is expected to grow by 8.4% to reach 308,349 metric tonnes and rice output is expected to increase by 3.6% to reach 332,000 metric tones of rice.

Forestry, which made a slight recovery in 2001 is projected to decline by one per cent this year to 431,195 cubic metres and Kowlessar said this is mainly because of the difficult external market conditions and the noticeable shift away from timber to concrete in the construction sector.

Agricultural products, livestock are targeted to grow by five per cent, other crops by two per cent and fishing by three per cent.

However, the mining and quarrying industry is expected to show a decline in production by 12.4%. Bauxite output is expected to fall by 17.7% to 1.6 million metric tones, partly because of the contracting markets for metallurgical grade bauxite. Gold output is expected to fall by 12.3% to 437,948 ounces as a result of falling production by Omai Gold Mines Ltd.

Diamond declaration is expected to decline to 124,000 metric carats, premised on the exhaustion of those recovered areas, which have been intensively mined in the last three years using new technology.

The engineering and construction sector is projected to growth by 7.8%, while the services sub-sectors are expected to perform decently. Transport and communications is expected to show a five per cent growth, other services 3.5% and financial services 2.5%.

Meanwhile, Guyana's Balance of Payment position is expected to further deteriorate. The balance of trade last year had declined by US$13.6 million and merchandise export was only US$490.3 million or equivalent to 82% of the earnings in 1997. Merchandise imports last year fell by 0.3% to US$584 million reflecting the 8.7 per cent increase in fuel and lubricants and a fall of 2.6% in the other categories of goods. The overall balance of payment deficit in 2001 was US$8.4 million, covered by the Bank of Guyana's reserves and debt forgiveness.

Merchandise export this year is projected to decline to US$489 million as a result of reduced earnings. Merchandise imports are expected to increase to US$595 million. The overall balance of payment deficit is expected to widen to US$16 million and again be financed by reserves and debt forgiveness.

Meanwhile, current revenue is expected to reach $43.8 billion. The Guyana Revenue Authority is expected to collect $40.9 billion, of which $20.7 billion is to come from the Inland Revenue Department and $20.2 billion from the Customs and Trade Administration (CTA). IRD collected $19.7 billion last year, $71 million more than projected, but the CTA's collection was only $18.1 billion, a loss of $2 billion; $1.5 billion on international trade and $525 million on domestic goods and services.