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Poor sugar performance leads to economic downturn
– 2013 growth projection revised from 5.3% to 4.8%
An extremely poor performance in the local sugar industry has led to Guyana having to revise its economic growth projections downward. This was reported by Finance Minister, Dr Ashni Singh, who on Friday last made the disclosure that Guyana’s economy only grew by 3.9 per cent in the first half of this year.
As a result, he said that Guyana has had to revise its projections for the year down to 4.8 per cent. Dr Singh had originally projected the local economy to grow this year by 5.3 per cent.
Finance Minister, Dr Ashni Singh
According to the Finance Minister, the sugar industry realized a dismal 48,038 tonnes, which translates into a 32.5 per cent decline over the corresponding period last year. Sugar is now projected to realize just about 190,000 tonnes for the year.
Dr Singh blamed the poor performance by the sugar industry on its continued struggle to grapple with “technical and operational challenges.” He did not specifically mention the Skeldon Sugar Factory which has practically done no grinding for the year.
The rice sector, however, performed far better, with a bumper first crop of 263,228 tonnes, representing a 25 percent increase over the corresponding period last year.
According to Dr Singh, barring any “unforeseen adverse developments, the original projection of 440,106 tonnes for the full year will be surpassed.” He said that rice production is now projected to grow by 15.9 per cent.
Dr Singh said that for the year, thus far, Guyana has earned US$83.3M from its rice exports.
The Minister also reported gold declarations increasing significantly, up 27 per cent over the corresponding period. He said that for the first six months of 2013, just about 234,498 ounces were reported. Guyana earned US$301M from its exports for the period.
The Finance Minister did point out that while there was a decrease in prices on the world market for gold, there was a significant expansion in the volume of the mineral exported, hence the healthy returns.
While there was a significant surge in the production of livestock during the first half of 2012, there was not a repeat of that this year.The industry grew by 1.9 and according to Dr Singh, overall growth for the year is now projected at 3 per cent.
Meanwhile, for overall exports across the sectors Guyana earned US$589.5M in the first half of 2013, in comparison to the US$582.5M received a year ago over the same period.
Central Government raked in a total $71.7B in revenue for the first half of this year. This represents a 10.5 percent increase over the corresponding period in 2012. The increase was mainly due to robust performance across several tax revenue categories.
Tax revenue amounted to $65B, with non-tax collections increasing by 8.6 percent to $6.8B.
According to Dr Singh’s midyear report, internal revenue collections amounted to $28.9B which is 11.7 per cent more than the corresponding period last year. He attributed this upturn to a $2.3B increase in corporation tax collected from private sector companies.
This, he said, reflects “the underlying growth in the economy and improved profit performances in several sectors.”
Dr Singh also said that personal income tax collections under the system of Pay As You Earn (PAYE), reduced by $582.1M. He said that this is as a result of the reduction in the PAYE rate from 33S! per cent to 30 per cent as announced in the 2013 Budget.
Customs and trade tax collections amounted to $5.9B, an increase of $186.5M over the same period last year, and according to Dr Singh, this increase is due primarily to increased import duties.
Value Added Tax (VAT) collections have for the seventh consecutive year increased, with government collecting in the first six months of this year some $17B. This represents a 5.6 per cent increase over the same period last year, and Dr Singh said this increase was driven by a 13.6 percent increase in collections from imports. He said that collections from the domestic supply of goods and services reduced by 3.8 percent.
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