Inflation hurts consumers and the economy as a whole. The poor is more affected than the wealthy. Consumers carry the burden of inflation (price rise) as they have to shell out more money for the same items.
Inflation is the measure of the average rise in prices over a period of time of goods that are basically used by an average family. It is measured at regular intervals (monthly, quarterly, semi-annually, and yearly) for comparison purposes to monitor the state (growth) of the economy so that responsible government can take effective measures to control inflation. I am told that inflation in Guyana is a mere 2%. That is fantastic – and by ‘fantastic’ I mean a great accomplishment in the management of the economy as well as unbelievable (really 2%?). In contrast with Guyana, inflation in USA is 3.4% and Canada 4.1%. Clearly, Guyana has a better handle on inflation than the developed economies. Is that credible? Was a mistake made? What is Guyana doing that the Americans and Canadians are not doing? The American and Canadian economists need to learn from our great Guyanese economists.
Guyana’s economy is closely tied in with American and Canadian and other foreign economies. We get most of our imports, some of which are used in the measurement of inflation, from those two giant economies. American fruits and vegetables and other goods are sold at stalls throughout Guyana. More Guyanese live in USA and Canada than in Guyana; the diaspora enjoys a higher standard of living and better quality of life. North American based Guyanese who visited Guyana over the years always complained that goods were more expensive in Guyana (measured in American or Canadian dollars) than in USA or Canada. They said the price of items that their hosts purchased in Guyana is much higher in Guyana than in their new adopted homeland. Non-Guyanese expats also affirmed to me that cost of living in Guyana is higher than where they lived in America. How come the inflation in Canada and USA is higher than that of Guyana? Or is it so?
I regularly traveled from Crabwood Creek to Charity several times a year for last several decades and routinely visited markets, interacted with vendors and shoppers, and queried about prices of items. I am yet to hear any vendor or consumer (shopper) said prices of basic goods dropped. Almost all items tend to show an increase in pricing from previous trip. Consumers tend to exaggerate on prices to gain sympathy and salary increase or a handout from a foreigner. The price of almost every item more than doubled over the last five years. Some were dynamic – went up and down like a roller coaster. Some prices went down as per my investigation over the last few months while others went up. Baigan, for example, went down from US$4 a bundle to $3 a bundle over three months. The same bundle sells for US $2 in America. Pumpkin also went down from US$4 a cut to $3 for the same cut. The same piece sells in America for $1.50. Bangamarie went up from seventy-five cents to one dollar a pound. In November, Bangamarie was elling at a lower price than in August. Except for Guyanese fish, almost every good that make up the Guyanese diet is cheaper on Liberty Avenue, Richmond Hill, than at Stabroek or Skeldon or Charity markets. Plantain is cheaper in NY, Miami, Washington, and Orlando than in Guyana. Pachounie and most meats are cheaper in America than in Parika or any market in Guyana. Sorry, I don’t know prices in Little Guyana in Toronto. My last visit there was in late August and I found prices of vegetables in Little China that Guyanese Canadians patronized was lower than in Mon Repos market. My last visit to markets in Little India in London also found lower prices than Port Mourant or Leonara markets of vegetables and basic food that comprised the diet of Guyanese. I believe the price of Guyanese used foods in UK, Canada, and USA are relatively stable and cheaper than in Guyana.
In contrast, in Guyana every family shopper I conversed with in Guyana said they spend three to four times for the same goods they purchased five years ago. The items of some goods have stabilized from last year to now but certainly didn’t drop.
The last time I taught economics almost a decade ago, my recollection is inflation is calculated from aggregating the average prices of a list of items that make up a basket of goods. Same is done monthly and compared with preceding month or year. That is how one gets the inflation rate over a comparative period — at least that is the standard for measurement in America, Canada, UK, India and globally as required by IMF or World Bank. It is interesting to know what method is used in Guyana to calculate inflation. What is the basket of items? When was it last updated? Taste of consumers has changed. New items need to be updated in the basket. Can the agency that calculate inflation (Is it the Bureau of Statistics) explain how inflation was calculated and how it came up with the 2%.