Oil related activities, expansion in mining, push Guyana’s GDP growth rate to 5.4 percent in 2019

Jul 02, 2020 News

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– Finance Ministry’s end of year report

Guyana’s Gross Domestic Product (GDP) for 2019 attained a notable 5.4 percent growth rate on account of increasing activities in the oil industry as well as expansion in the mining and quarrying sector.

This was noted in the nation’s latest end of year report that was prepared by the Ministry of Finance. Kaieteur News understands that the GDP was calculated based on the most recent update that was done to the methodology used by the Bureau of Statistics. The revised system now brings Guyana in line with international best practices for calculating such statistics.
Expounding on the details of the economy’s growth, the Ministry of Finance noted that real GDP for 2019 is estimated to have grown by 5.4 percent, with the non-oil real GDP increasing by 4.3 percent. The estimated real GDP for 2019 was supported by significant expansions across most major sectors, including mining and quarrying, manufacturing, construction and services.
The Ministry noted that stronger growth was constrained by a marginal decline of 0.5 percent in the agriculture, forestry and fishing industry, despite gains in rice, other crops and fishing. With respect to the rice industry, the Ministry said that the quantity of paddy harvested in 2019, reached 1,049,874 metric tonnes, the highest level since 2015, when the industry attained record production of 1,058,129 metric tonnes. Production in 2019 surpassed the 2018 harvest by 8.8 percent, or 84,755 metric tonnes, resulting in growth in the rice cultivation industry of 1 percent, in 2019.
In the other crops subsector, pumpkin, cocoa, ginger, peppers and pineapple, expanded by 0.3 percent.
As for fishing, the Ministry noted that this sector experienced mixed outcomes in 2019, with finfish production increasing by 19.7 percent over the previous year, and shrimp production declining by 28 percent, on account of the sargassum weed invasion, among other factors. In spite of these issues, the Ministry noted that this subsector expanded by 0.7 percent.
Turning its attention to sugar production, it was noted that this sector contracted by 11.8 percent in 2019, with Guyana Sugar Corporation (GuySuCo) falling significantly short of its production. Apart from this, the Ministry noted that there were remarkable gains in the livestock subsector with egg production growing by 45.3 percent, beef production 32.6 percent, pork by 66.8 percent, and mutton and chevon by 8.1 percent. Poultry production the Ministry said, did not recover sufficiently to overcome the decline recorded at the half-year. This resulted in a 7.8 percent decline in poultry production, in 2019 which, in turn, led to a contraction in the livestock subsector of 3.5 percent.
With respect to the forestry subsector, it recorded notable gains at the half-year that persisted into the third quarter. These were however, undone in the final quarter of 2019, resulting in a contraction of 3.9 percent for the entire year.
Further to this, the Ministry reminded that in late 2019, Guyana became an oil producing country. It noted that this development contributed to the 124.2 percent expansion in the petroleum and gas and support services subsector, which, in turn, drove growth of 10.6 percent in the mining and quarrying sector. In providing more details on this front, the Ministry said that the Guyana Industrial Minerals Inc. scaled up bauxite production ahead of the official commissioning of its mine and processing plant, scheduled for 2020. The Finance Ministry said that their output was enough to offset the lower production recorded by the two incumbent companies.
Additionally, the Ministry said that the two large mining companies in the gold subsector, Troy Resources and Guyana Goldfields Inc., recorded lower production, in 2019, largely as a result of operational setbacks that included the suspension of one company’s activities for almost three months. Kaieteur News understands that small and medium scale miners, on the other hand, increased declarations by 25 percent, in 2019, the highest since 2016. The Ministry said that this significant improvement was attributed to improved road and weather conditions as well as favourable prices. Like gold, the other mining subsector recorded growth for a second consecutive year, driven by an expansion in sand mining – a key input of the construction industry. This was strong enough to offset a contraction of 11.5 percent in diamond declarations
With respect to the manufacturing sector, the Finance Ministry said that it realized significant growth of 14.7 percent, in 2019, the highest rate since 2013, when the sector grew by 8.2 percent. This achievement was bolstered by rice and other manufacturing, which expanded by 26.4 percent and 14 percent, respectively.
Construction the Ministry noted, expanded for a fourth consecutive year, with growth reaching 3.1 percent, which was 0.2 percentage points above the rate achieved in 2018.
Like construction, the services sector expanded for a fourth consecutive year, in 2019, growing by 4.2 percent, the highest growth rate over the four-year period. Driving this growth was wholesale and retail trade and repairs, administrative and support services, and transport and storage, which grew by 5 percent, 5.8 percent, and 6.9 percent, respectively.

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