Anyone who studied economics, as I did, would know that accurate socio economic data is critical to addressing inflation and other problems facing Guyana and other country. Workable policy has to be based on accurate data to address socio economic issues. Without accurate data, effective policies can’t be planned to address persistent problems. Poor data make predictions and solutions difficult. If data is deficient, it introduces errors and uncertainty in planning, causing policies to fail as we saw during the Burnham and Hoyte dictatorship.
Scholars and researchers have complained about data, especially the lag in making available various indicators. I encountered difficulties in obtaining realistic data when I wrote my MA thesis and PhD dissertation on Guyana. Since independence, data supplied by government on practically everything, especially during the dictatorship, has been ‘suspect’. Scholars felt and feel the data was manipulated for political purposes during the dictatorship. One can’t wholly rely on data provided by certain agencies of the state (but treat them as estimates) especially if an agency wishes to make government look good or bad depending on political loyalty or instructions. In recent years, data seems more realistic than say during the dictatorship. Data was unavailable or had huge errors as Dr Ramesh Gampat explained in his latest book on Downsizing of the Economy. It is remembered, however, the state agencies provide data to economists, researchers, and policymakers, and one must accept them even at face value and work with them. There were shocks (like pandemic, war, natural calamities) to the economy during the last two years. Estimates or accuracy of data must reflect the effects of these shocks.
It seems incredible that inflation is only 8% when one’s (working class) salary can’t make ends meet. Prices or inflation data, in particular, are problematic in recent years. Prices have increased between two and four times for every item except for a few goods. While rentals, mortgage, and transport have gone up modestly, all of which are factored in measuring inflation, food prices have skyrocketed. Is the services sector under and or over represented in the basket of goods to calculate inflation. Prices of many services have risen and expenditures on them have increased dramatically. Is their weight in the consumption basket accurate. How about health and education expenditures — are they accurately represented given that government has subsidized education and aspects of health.
When inflation is given at say 8% and income is up by 10%, one concludes that the working class is in the driver’s seat. But that has not been factual. Inflation has eaten way all raises in the minimum wage and increments for state employees. Sugar workers have also been suffering, perhaps the most among all state workers.
Accurate data or consideration for the above points in calculating inflation will give a truer picture of real inflation. It will give a real picture of the economic state and also the economic conditions of the workforce especially their loss of purchasing power making it possible for state intervention to help the workforce. The state should consider the service of skilled economists to review data so we get a realistic or more accurate picture of macro economic and social indicators and how to address them.