The report also said the prospects for continued growth in 2002 hinge on continuing macro-economic stability and renewed emphasis on eliminating obstacles, generally, as well as focusing on selected sectors.

To this end, BOG said it would continue pursuing its objectives of fostering stable price and exchange rates to support economic activities

BOG said real Gross Domestic Product (GDP) grew by 2.9 per cent in the first half of 2002, as against the 1.3 per cent increase for the corresponding span last year.

The expansion was propelled in the agricultural sector and mainly through increased sugar production, while output in the poultry, manufacturing, engineering and construction, transport and communications sectors and financial services also made positive contributions.

But BOG noted unfavourable performances by rice, bauxite, gold and fishing and said growth in income reflected the varying real output performances in the various sectors.

The compilation said rate of inflation, based on the consumer price index, accelerated 4.1 per cent in comparison with 0.4 per cent for the corresponding period last year and the relatively sharp increase was the result of higher utility charges for electricity, water and telecommunication services and more food, medical and personal care costs.

BOG said the prices of clothing and furniture were relatively unchanged and the growing inflation was contained by continuing fiscal discipline, coupled with prudent monetary policy.

It said, due to a sharp improvement, the overall trade balance on the external front was strengthened and reflected a significant contraction in the current account deficit.

In contrast, though, the capital account deteriorated, resulting from lower transfers and other inflows in the form of trade credits and the total deficit was funded by debt relief under the original and enhanced interim Heavily Indebted Poor Countries (HIPC) initiatives which contributed to a rise in the net foreign assets at the Central Bank.

BOG said, too, that foreign exchange conditions on the cambio market were relatively stable, with a marginal depreciation of the Guyana dollar against that of the United States and a greater level of foreign currency transactions.

That situation was credited to reduced demand pressure on account of enhanced flows from the major export sectors and, additionally, the cambio market spread between purchases and sales rates rose marginally.

Reporting on the non-financial public sector, BOG said the overall financial position was strengthened on account of Central Government recording a smaller deficit, through larger current and capital receipts.

With respect to the operations of non-financial public enterprises, BOG said those were weakened, due to deterioration in the financial operation of Guyana Sugar Corporation (GUYSUCO), because of its high employment costs.

On the other hand, both total Government domestic bonded debt and the stock of external public debt were greater during the review.

The bigger domestic debt was attributed to an increase in the number of Treasury Bills issued to sterilise excess liquidity in the financial system but, in spite of this, interest payments declined because of the lower interest costs on maturing ones.

BOG said public debt grew mainly because of higher disbursements.

According to the compendium, the objectives of monetary policy, which aimed at management of the liquidity conditions to foster price and foreign exchange stability in support of economic activities, remained unchanged.

It added that, while growth of monetary and credit aggregates decelerated by the end of June 2002, broad money recorded growth of 1.1 per cent and credit to the private sector contracted by 1.6 per cent, indicating further consolidation by the commercial banks.