Loans to agriculture, manufacturing and other sectors decline - Central Bank

Loans to agriculture, manufacturing and other sectors decline – Central Bank

Jul 22, 2017 News

The Bank of Guyana has found that private sector credit has fallen by 1.5 percent for the second quarter compared with a decline of 1.3 percent one year ago. According to the Bank, this position reflected declines in credit to all the sectors, except for the real estate mortgage sector and the “other” category of the private sector.
The Bank explained that the “other” category comprises investments in local securities and shares and other equity in local companies.
Significantly, the Bank said that loans to the agriculture, manufacturing, distribution and personal sectors fell by 9.6 percent, 5.2 percent, 3.4 percent and 2.4 percent respectively while real estate mortgage loans and credit to the “other” private grew by 1.5 percent and 0.4 percent respectively.
The Bank also stated that the public sector (net) credit position worsened by 70.9 percent to $11,845 million from G$6,929 million at end-2016, mainly on account of a reduction in the deposits of the non-financial public enterprises.
Central Bank said that net credit to the central government was lower by 0.8 percent or $623 million to G$77,437 million at the end of March 2017.
Furthermore, officials at the Bank noted that Guyana’s economy registered uneven growth in sectoral output. The agriculture sector recorded increased production of rice and other crops ,which was due to greater hectares cultivated and favourable weather.
In contrast, sugar and forestry output declined from the consequences of a diminished Wales sugar estate, downsizing of Barama Company Limited and tighter market conditions.
The mining and quarrying sector, it said, registered higher output of gold, which was attributed to sustained small and medium scale mining as well as large gold mining companies.
However, bauxite outturn was lower on account of declines in the output of Chemical Grade (CGB) and Calcined Grade (RASC) bauxite, as global market conditions remained fragile.
With respect to the manufacturing sector, Central Bank found that there was higher production of paints, non-alcoholic and alcoholic beverages, and flour, but lower production of oxygen, margarine, biscuits and stockfeed.
Additionally, the construction sector experienced favourable outturn due to public projects. However, private construction was relatively subdued. Central Bank also said that for the second quarter, the services sector was estimated to be weak, owing to sluggish activities in the financial, insurance, and other service industries.
With regard to the inflation rate, Central Bank said that this increased to 0.6 percent at the end of March 2017. This outturn, it said, was attributed to increases in food prices by 0.4 percent and housing (which comprises fuel and power) by 0.2 percent.
Additionally, the cost of transport, communication, education, and recreation and culture services, also contributed to the higher inflation rate.
Furthermore, Bank of Guyana stated that the overall balance of payments recorded a deficit in the second quarter of US$8.7 million. This performance was largely due to a deficit on the current account caused by a higher merchandise trade deficit.

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Loans to agriculture, manufacturing and other sectors decline – Central Bank

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