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Exports projected to rise in 2018 – Finance Minister
Guyana is projected to see a rise in exports for 2018. This is according to Finance Minister, Winston Jordan.
The economist noted that growth in the agriculture, fishing, and forestry sector will be driven by the expected expansion in the various subsectors, except sugar. Building on the solid performance in 2017, Jordan said that the rice industry is expected to expand to 617,353 tonnes, an increase of 2.5 percent.
He said that the other crops subsector is anticipated to grow by 2.3 percent, as diversification efforts continue and productivity gains are made.
The Finance Minister noted that the livestock and fishing subsectors are projected to grow by two percent and 2.3 percent, respectively, driven by consumer demand. On the other hand, sugar production is expected to contract by 24 percent to 115,447 tonnes.
Overall, Jordan said that the agriculture and fishing sector is anticipated to contract in 2018 by 0.7 percent, largely due to the challenges facing the sugar industry.
With respect to the forestry subsector, the Finance Minister said that this area is expected to grow by eight percent to 320,760 cubic metres, as the reallocation of concessions continue, new concessionaires establish operations, and stimulus measures are put in place in 2018.
The mining and quarrying sector is projected to rebound in 2018, expanding by five percent. Jordan said that this growth will be driven by the bauxite, gold, and quarrying. He stated that the bauxite industry is projected to produce 1,897,205 tonnes, resulting in an increase of 23.3 percent.
As for gold declaration, the economist said that this is budgeted at 736,000 ounces, an improvement of 3.3 percent, as a result of favourable prices, as well as measures by regulatory bodies to improve recovery rates and ensure compliance.
Jordan continued, “Exports are projected to rise in 2018, as both production and commodity prices are expected to rise, with gold receipts projected to continue to strengthen. Gold, timber, and other exports, which account for nearly 78 percent of all exports, will see an increase in export earnings.
Finance Minister, Winston Jordan
“Growth in merchandise imports is projected at 5.7 percent driven primarily by non-petroleum imports. The capital account surplus will increase marginally to US$212.9 million, on account of higher net inflows to the private sector in the form of foreign direct investment which will be driven by expansion of activities in the petroleum industry.”
Despite the expectation that rice and other products will expand in 2018, by 2.5 percent and 2.4 percent, respectively, Jordan said that the decline of the sugar industry will depress the overall growth of the manufacturing sector, which is expected to remain virtually the same.
Jordan said that growth in the construction sector is targeted at 15 percent, contingent on an improved implementation rate of the Public Sector Investment Programme (PSIP) and expansion in the housing sector.
The Finance Minister stated that the services sector is projected to grow by three percent. He said that all categories of services are expected to rise, with significant growth of the transportation and storage, information and communication, and education subsectors.
He said, “The balance of payments deficit in 2018 is expected to widen to US$79.7 million from US$53.1 million in 2017. This increase is driven by an expansion of the current account deficit to US$292.6 million, from US$235 million in 2017, due to a widening of the merchandise trade deficit.
Imports are projected to increase at a higher rate than exports, with growth in each projected to be 5.7 percent and 0.8 percent, respectively.”
The Finance Minister added, “Total revenue is anticipated to rise by 4.8 percent to $201.9 billion in 2018. This is driven by a projected rise in tax revenue by 7.3 percent. Non-tax revenue is expected to decline by 13.1 percent to $20.5 billion, as a result of a decline in transfers from statutory bodies by $3.8 billion. Central Government expenditure is expected to increase by 6 percent to $256.8 billion.”
Jordan said that recurrent expenditure is anticipated to grow to $197.1 billion in 2018, an increase of 7.1 percent. This will be driven by an 8.6 percent increase in personal emoluments, to $59 billion; a 6.5 percent increase in transfer payments, to $76.7 billion; and an 8.3 percent increase in interest payments, to $8.7 billion.
Capital expenditures are budgeted to rise by 2.7 percent, to $59.7 billion.
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