2016 growth rate adjusted upwards- analysts

Apr 16, 2017 News

According to the Economic Policy Analysis Unit (EPAU), within the Ministry of Finance, Guyana’s economy last year has actually performed better than expected.
While a 2.6 percent growth rate was initially projected, the economy actually grew to 3.3 percent.
According to the Unit, the revised growth rate was mainly driven by 45.3 percent growth in the mining and quarrying sector.
However, while strong performance occurred for gold, diamond and quarrying industries, the Economic Policy Analysis Unit said that the agricultural sector contracted by 10.4 percent.
It pointed out that the El Niño phenomenon was partly to be blamed for the dismal performance in the rice and sugar industries during the first half of the year.
The Unit stated, however, that late planting in both industries also hampered production for the second half of the year. In addition, it was noted that union strikes during the fourth quarter of the year adversely affected production in the sugar industry.
The Unit within the Ministry of Finance stated also that the forestry industry performed poorly, as a result of a halt in the awarding of concessions and sluggish global demand for timber products, which resulted in the contraction of operations of two companies.
The Unit noted that the government aims to reform the industry so as to benefit the nation over the medium-to-long term.
It was also noted that economic growth is projected at 3.8 percent for 2017. The International Monetary Fund (IMF) on the other hand has projected real economic growth of 3.5 percent, driven by an increase in public investment, continued expansion in the extractive sector, and a recovery in rice production.
Speaking to production figures, the Economic Policy Analysis Unit said that in December, 2016, some 28,184 tonnes of sugar was produced, which resulted in an end of year total of 183,491 tonnes for 2016 compared to 229,318 tonnes produced during 2015.
The Unit said that sugar production for 2016 was 20 percent lower than 2015, due to the El Niño phenomenon, which severely affected the first crop production. That combined with late planting and strikes during the second half of the year. Sugar production, though budgeted to increase in 2017, may decline due to reduced crop from the Skeldon estate.
As for rice production for December, 2016, the Unit said that this reached 1,582 tonnes, down from 6,267 tonnes in December, 2015.
The Members of the Unit said that this resulted in production for 2016 totaling 534,766 tonnes compared to 687,784 tonnes produced in 2015, a reduction of 22.2 percent.
Similar to sugar, it was observed that rice production for 2016 was lower than 2015 due to the El Niño phenomenon combined with late sowing for the second crop. The rice industry is expected to rebound in 2017.
With regard to the forestry sector, the Unit said that production for December 2016 amounted to 39,091 cubic metres compared with 96,026 cubic metres in December, 2015.
The members of the Unit said that this resulted in production reaching 327,781 cubic metres, in 2016, compared to 427,351 cubic metres in 2015. The officials said that lower production for 2016 resulted from the Government reorganizing the sector in pursuit of better forestry management and greater value added.
The downsizing of Barama, during the fourth quarter, had a negative impact on production.
As for bauxite production for December 2016, some 89,644 tonnes was recorded compared to 127,282 tonnes in December 2015. As such, production for 2016 amounted to 1,479,090 tonnes compared to 1,526,467 tonnes produced in 2015, a reduction of 3.1 percent.
According to the EPAU, performance within the bauxite industry was credible in the first quarter of 2016.
“However, production levels began to fall from the second quarter of the year and continued into the third and fourth quarters due to plant failure at one of the companies, an issue which was expected to be resolved promptly but prolonged for a greater period,” the Unit said.
In the area of gold production, the Policy Analysis Unit said that for December, 2016, production totaled 91,540 ounces compared to 70,834 ounces achieved in December 2015.
The Unit said that this resulted in production reaching 712,706 ounces in 2016, representing an increase of 58 percent over 2015.
The Unit stated that the strong performance in the gold industry during 2016 was underpinned by increased production by the small and medium sized miners, and the two expatriate companies.
Continued growth is expected in the industry in 2017.

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