Financial mid-year reports declining earnings from vehicle imports

Oct 17, 2010 News

… documents bauxite’s dismal performance

Despite reporting that excise tax declined in part because of the reduced collections from motor vehicles linked to lower levels of vehicle imports, the same report says that higher registrations of vehicles for public transport, increased commercial traffic over the two river bridges, greater internal use of land, sea and air transport directly benefited the industry.
“As a result of the first half performance some momentum is expected to be sustained into the second half which will result in a four per cent growth at end of year, compared to 3.6 per cent at the time of budget.”
This is according to the 2010 mid-year report which was tabled by Finance Minister Dr Ashni Singh. But just a week ago, Commissioner General of the Guyana Revenue Authority, Khurshid Sattaur, announced that the latest series of vehicles had almost expired just over one year of its introduction. Some 10,000 vehicles were sold in 14 months at an average of 71 vehicles per month or just about three a day.
For 2010, the bauxite industry was projected to grow by 5.7 per cent, gold declaration by four per cent and diamond declaration by 4.2 per cent, an overall 4.2 per cent projected growth in value-added for the mining and quarrying industry.
But according to the 2010 mid-year report recently tabled by Minister of Finance Dr Ashni Singh, the half year performance reveals an opposite trend, a decline of 4.1 per cent in value-added over half year 2009.
Developments in the subsectors have led to the overall industry showing a reversal in growth to a revised 2.8 per cent decline. The bauxite industry contracted by a whopping 19.6 per cent.
With the exception of Chemical Grade Bauxite (CGB) which benefited from enhanced market demand, production levels fell in all other grades, according to the report.
The subdued production performance resulted from high accumulation of inventory brought forward from the previous year.
Global demand for alumina and aluminium products is expected to grow in the second half and as a consequence, value-added in the bauxite sub-industry is expected to record a less severe decline by end of year of 9.7 per cent.
The report did mention some positives, pointing to the fact that the electricity and water service industry grew at the half year by 3.6 per cent in line with the overall budget growth of 3.4 per cent for the year which remains unchanged. The programme for the provision of these services, according to the report by the Finance Minister, will be driven by the expanding new and existing communities as a result of the housing drive over the years which requires the installation of the basic needs.
“Construction continues to be one of the major sources of growth with output expanding by 9.5 per cent in the first half of the year…This reflected accelerated implementation of the public sector investment programme along with continued strong growth in private construction.”
The report said that as a result of the sustaining of private construction in the second half of the year, there is a resultant upward revision of the industry’s growth to three per cent for the year. “The real estate industry achieved a two per cent growth in line with budget target which is maintained for the whole year.”
Wholesale and retail trade showed strong growth of seven per cent at end of the first half. Notwithstanding the first half performance, the growth projection of 4.9 per cent is conservatively revised to 4.8 per cent. The transportation and storage industry also showed a strong first half performance of 7.1 per cent.

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Financial mid-year reports declining earnings from vehicle imports

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