Annual Report 2015
27
downside risks that exist from low commodity prices, challenges in
the sugar industry, and finding of markets for rice to replace the loss
of the Venezuelan market. These risks could put added pressure on
Guyana’s fiscal resources and cause the deficit to expand in 2016.
The promise offered by ExxonMobil’s announcement of a major
oil find off Guyana’s coast is however a positive mitigant to these
downside risks.
Suriname
While the political environment in Suriname remained stable
following Desiré Bouterse’s re-election as President in May 2015,
Suriname’s economy is estimated to have slowed in 2015, with real
GDP growth falling to 2.7% from 3.4% in 2014. This decline was
mainly due to lower export earnings from the mining sector which
has traditionally been one of the main drivers of economic growth,
as both gold and bauxite contribute a combined 50% of Suriname’s
exports. The slowdown in this sector has led to a reduction in
foreign reserves and a widening of the fiscal deficit.
In light of dwindling foreign reserves, the Central Bank of Suriname
was challenged in meeting the increasing demand for foreign
exchange, which threatened the currency peg to the US dollar. In
March 2015, an agreement was made between the Central Bank
and China’s Central Bank for a bilateral currency swap to help ease
the demand for US currency. It is estimated that the monetary
authority was able to maintain the exchange rate at an average of
SR$3.30/US$1 in 2015.
The oil industry is engaged in new exploration and has the potential
to expand modestly, but the current weak oil price outlook will
be challenging for the industry. The domestic economy should
however experience slight growth from maturing investments in
manufacturing, mining and energy. Privatisation of state plantations
and plans for major palm oil investment are expected to boost
employment and agricultural exports.
Given the environment of weak commodity prices and Suriname’s
high dependence on commodity exports, growth is expected
to remain subdued in 2016. Further, the economy faces fiscal
constraints as the government has already introduced austerity
measures in its fiscal 2016 budget. This fiscal tightening is expected
to bring about inflationary pressures, lower consumption and
further stymie economic growth in the next fiscal year.
Outlook
While economic challenges are likely to feature through 2016, we
expect the Group to continue to perform satisfactorily through
prudent management and our strong balance sheet.
In February 2016, the Group will bid farewell to Mr. David Dulal-
Whiteway who has served the Bank for over 25 years, with the
last ten as Managing Director. Under David’s leadership, the Group
withstood the effects of the 2008 financial crisis, entered not just
new markets and territories but also new cultures and continents,
and doubled our profit and asset base from $664 million and $29
billion in 2004 to $1.2 billion and $66 billion in 2015.
In turn, I extend a warm welcome to Mr. Nigel Baptiste, who has
been appointed Managing Director Designate. Nigel has a wealth
of experience accumulated over 24 years, with 16 years in Executive
Management in many diverse areas throughout the Group. I am
very confident that Nigel will continue to build on the rich legacy
left by David and take the Republic Group to new heights.
I would like to extend a special thanks to Mr. Christian Mouttet who
resigned from the Board of Directors after serving for over five years
and I welcome his replacement, Mr. Peter Inglefield.
I wish to thank my fellow Directors for their expertise and support,
and the staff, customers and shareholders of this organisation for
their continued support, loyalty and dedication throughout the
year.
