COVID-19, protracted elections resulted in a 4.9% decline in non-oil economy — Minister Edghill

Sep 12, 2020 News

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Due to the severe impact of COVID-19 on health, social life and businesses – and further dampened by the protracted March 2020, General and Regional Elections – Guyana’s non-oil economy for the first half of the year has declined by 4.9%. These and other projections were shared by Minister of Public Works, Juan Edghill, who on Wednesday presented the government’s emergency $330B budget for the year.

Agriculture, Forestry and Fishing
During his presentation of the budget, Minister Edghill shared that in the 2020 half-year, the agriculture, forestry and fishing industries contracted by 4.1% as a result of lower production in the other crops, livestock, forestry and fishing sectors. He indicated that while some of these industries are expected to perform better in the second half, as a whole, the agriculture, forestry and fishing industries are projected to decline by between 0.1% and 2.3% in 2020.

He turned to the sugar industry, which expanded by 10.4% at the half-year, and projected that this is expected to grow by between 10% and 15.4%. The minister added, “Expansion is also expected in rice growing, with forecasts for second crop production anticipated to result in growth of between 2 and 3.5%.”
Meanwhile, the livestock industry, which contracted by 2.3% at the half-year, is expected to rebound in the second half to realise growth of between 0% and 2.4% in 2020. Similarly, the other crops, forestry, and fishing industries are expected to see improvements in the second half of the year: other crops is forecasted to contract by between 1% and 3%, better than the decline of 4.7% at the half-year; forestry is projected to contract by between 11.8% and 15%, an improvement over the half-year contraction of 20.8%; and, fishing is projected to contract by between 3.5% and 10% , above the contraction of 12.1% at the end of June.

Mining
With regards to the gold mining industry, which expanded by 2.1% at the half-year, also experienced some setbacks, particularly with two large-scale companies, who together reported a 36% decline in production, when compared with the same period in 2019. Edghill highlighted that while large-scale production is expected to continue to dwindle in the second half, the output of small and medium scale miners, in response to higher prices, is expected to bolster production, pushing growth to fall between -2% and 0.7%.
He went on to say that the bauxite industry continues to face reduced global demand for its output, which, in addition to the stoppage of mining by one company, resulted in a contraction of 42.3% at the half-year. This industry, Edghill said, is expected to contract by between 40 and 51% in 2020.
“Similarly, the other mining industries also saw a significant contraction at the half-year, by 56% , as a result of lower demand,” the minister said. He pointed out, however, that the resumption of construction activities is expected to see improved output in the second half, resulting in a less severe contraction of between 20% and 30% in these industries.

Manufacturing
Edghill indicated that the manufacturing industries contracted by 0.2% at the half-year, despite expansions in sugar and rice manufacturing, by 14.2% and 7.2% respectively. This was due to a significant contraction, he pointed out, of 5.7% in the other manufacturing industries.
Edghill explained that, “While the output of these industries is expected to improve in the second half amidst growing demand, other manufacturing is still expected to contract by between 1% and 5% in 2020. Overall, the performance of the manufacturing industry in 2020 is projected to fall between a contraction of 1.4% and an expansion of 1.9%.”

Construction
At the half-year, the construction industry contracted by 5.6%, despite the emergency measures gazetted in April which were expected to result in a more severe decline. The minister went on to say that while the formal easing of restrictions on construction activities in the second half, and the resumption of public sector construction should not result in a significant decline in the industry, it is still expected to contract by between 4% and 7% in 2020.

Services
Guyana’s service industries, which are expected to be worst hit by the emergency measures to curb the COVID-19 pandemic, contracted by 3.8% at the half-year Edghill said. During this presentation he related that “Wholesale and retail trade and repairs contracted by 14.7%, transport and storage by 25%, accommodation and food services by 32.9%, professional, scientific and technical services by 20.7%, administrative and support services by 5.3%, arts, entertainment and recreation by 45.8%, and other services by 51.2%.”
He noted that while the conclusion of the General and Regional Elections has led to improved consumer sentiment and an expectation of improved performance in some of the service industries, the unpredictability of the COVID-19 pandemic threatens to dampen any recovery. As such, service industries are forecasted to contract by between 0.7% and 3.5%, in 2020.

 

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