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Guyana's economy registers 5.9 % growth

Written by Demerara Waves
Thursday, 01 September 2011 22:10
Source

Guyana's economy has achieved real economic growth of 5.9 percent in the first half of 2011, despite poor performances in the fisheries, forestry and transporation, the state-run Government Information Agency (GINA) reported.

The latest economic update is contained the fifth mid-year report presented by the Finance Ministry to the National Assembly on Thursday.

This growth is a continuation of the robust performance of recent years and, in particular, building on its previous achievement of five consecutive years of positive growth since 2006.

Underlying this overall expansion in real gross domestic product in the first half was growth in the non-sugar sectors of five percent, while the sugar sector also contributed to the overall acceleration in growth.

The report stated that, “as a result of this performance, and given updated outlooks for the various productive sectors, the economy is now projected to grow by 5.1 percent in 2011 with non-sugar growth projected at 3.4 percent, an upward revision from the original projections of 4.6 percent and 2.8 percent respectively at the time of Budget 2011.”

Government remains committed to maintaining macroeconomic stability and the maintenance of momentum in its transformational efforts, notwithstanding an often hostile global environment, is testimony to the economic resilience achieved as a result of a disciplined policy stance and sustained implementation of a sound and responsible policy framework.

Sugar – tentative signs of recovery

In the first half this year, the sugar industry showed tentative signs that the path to recovery has commenced. The sector returned a 2011 first crop of 106,871 tonnes, reflecting a 30.5 percent increase over the first crop of 2010 and the best first crop performance since 2004. The sector’s projected growth for the full year remains unrevised at 35.3 percent.

Rice- highest first crop in industry’s history

The rice industry continued its successes of recent years into the first half of 2011, coming off a remarkable production performance in 2010. The 2011 first crop rice production at 207,514 tonnes was 23.3 percent higher than the corresponding period in 2010 and the highest first crop in the industry’s history.

This growth in production was attributed mainly to significantly improved drainage and irrigation as a result of government investments, the development of a new and more tolerant rice strain by the Guyana Rice Development Board, higher yields and, most importantly, a higher acreage of paddy planted.

Other Crops- grew by 3%

The other crops sector continues to benefit from Government’s Agricultural Diversification Programme and the Grow More Food Campaign and at the end of the first half the industry recorded a three percent growth rate. Weather conditions are expected to be more favourable after July, which would augur well for production, and there is no revision to the projection of two percent growth.

Livestock- growth projection revised upward

Production in the livestock industry was targeted to remain stable through 2011. However, for the first half of the year overall production levels actually increased by 2.7 percent, with increased production evident in areas of poultry meat, table eggs, mutton and beef while pork production declined. As a result there is a now a higher expectation of the eventual annual output and the original growth projection has been revised upwards to 0.6 percent.

Bauxite- production on the increase

Production of bauxite reached a total of 815,505 tonnes at the half year, an increase of 38.6 percent compared to the same period in 2010. The composition of the industry’s output, a higher proportion of lower grade to higher grade product, converts into a sub-sector growth of 13.8 percent. With this production mix expected to continue during the second half, the expected growth rate for value added in the bauxite industry is now projected at 13.4 percent.

Gold- growth revised upward

Total gold production in the first half of 2011 was 163,413 ounces, an increase of 14.9 percent over 2010. With gold prices hovering firmly above US$1,500 per ounce and approaching US$1,800 per ounce in the post mid-year period, there is every incentive to invest and operate in the industry.

Gold production for the year is now projected to reach 320,000 ounces, resulting in an upward revision in the industry’s projected growth from 2.9 percent to 3.7 percent.

Manufacturing- growth by 10.6%

The manufacturing sector grew by 10.6 percent at the half year, driven largely by the manufacturing component in sugar and rice production, but with other manufacturing also estimated to have grown by 2.3 percent. The annual growth target for the sector has been revised upwards from the budgeted 7.7 percent to a now expected 9.4 percent.

Electricity and Water- grew by 2.6%

With the continued investments by Government, the electricity and water sector has grown by 2.6 percent for the comparative half-year and with investments in these services expected to be a continued priority, the annual growth rate has been revised upwards from 0.4 percent to 2 percent.

Construction- expanded by 4%

Engineering and construction activity expanded by 4.0 percent in the first half of 2011. Imports of building materials and construction-related public investment continued to reflect strong growth. The sector is now targeting a growth of 5.5 percent.

Information Communication Technology- continuous expansion

The information and communication sector which has been recognised as an important emerging industry complements economic activity in all sectors and continues to expand throughout the country. The sector is estimated to have grown by 5.5 percent in the first half and as a consequence the initial budget projection for the year of 5 percent is retained.

Finance and Insurance- grew by 16%

The finance and insurance industry, estimates at the end of the first half indicate that the industry recorded a growth rate of 16 percent, with much of this driven by expansion in activity by the commercial banks. The industry is therefore projected to grow by 5.3 percent, somewhat higher than the original projection of 4 percent.

Social Sectors- positive growth

Education and health and social services which have a growing private sector component recorded estimated growth of three and 3.4 percent respectively for the first half. As a result their budget growth projections have been revised to 1.5 percent and 1.9 percent, respectively.

Fisheries- downward trend seen

The fisheries industry was targeted to grow just marginally by 0.4 percent over the production performance of 2010. However, during the first half of the year, the industry recorded a downward trend, with negative growth of 2.2 percent. A contributory factor in the reduced production was higher prices for fuel, a critical input in the industry. The industry is now projected to contract by 4.7 percent in the full year.

Forestry- negative growth

In the forestry sector, during the first half of 2011, production of logs, lumber and roundwood all contracted, resulting in an overall negative growth in the industry of 30.3 percent.Notwithstanding the resumed production of plywood manufacturing operations, sustained international demand for several of Guyana’s traditional species now boosted by the penetration of Guyana’s lesser used species into the international market, and attendant improvement in international market prices, the sector is now projected to contract by 19.9 percent by yearend compared to an earlier projected contraction of 1.4 percent.

Transportation- declined by 6.5%

In the transportation and storage sector, there were significant interruptions of road transport during the first half on account of severe weather especially between the coastland and the hinterland, particularly Region Nine. This resulted in the sector suffering an estimated declined by 6.5 percent in the first half, and overall projected performance for the year being revised downwards from 3.9 percent to 3.7 percent.
Guyana records 5.9% economic growth -- Export earnings expanded by 34.6 percent to US$533.1 million

Written by Johann Earle
Friday, 02 September 2011 04:08
Source - Guyana Chronicle

*The report said in the mining and quarrying sector, bauxite production reached a total of 815,505 tonnes at the half year, an increase of 38.6 percent compared to the same period in 2010.

*Total gold production in the first half of 2011 was 163,413 ounces, an increase of 14.9 percent over 2010.

*Private sector credit grew by 6.7 percent and amounted to $119.8 billion at end June 2011.

*The 2011 first crop (rice) was 207,514 tonnes, 23 percent higher than at the corresponding period in 2010 and the highest first crop in the industry’s history, the report said.

*“The (sugar) sector returned a 2011 first crop of 106,871 tonnes, reflecting a 30.5 percent increase over the first crop of 2010 and the best first crop performance since 2004,” the report said.


Guyana’s economy grew by 5.9 percent in the first half of the year, building on the achievement of five consecutive years of positive growth since 2006 and giving a positive prognosis for end of year results.

The achievement of this level of growth in the first half was described by Minister of Finance Dr. Ashni Singh as most commendable, and was reported in the 2011 Mid-Year Report 2011 tabled by the Minister in the National Assembly yesterday.

The report said that underlying this overall expansion in real gross domestic product in the first half of 2011 was growth in the non-sugar sectors of five percent, while the sugar sector contributed to the overall acceleration of growth.

The report said that, as a result of this positive performance and given the updated outlook for the various productive sectors, the economy is projected to grow by 5.1 percent in 2011. The report said that the non-sugar sector is projected to grow at 3.4 percent, revised upward from the original projection of 4.6 percent and 2.8 percent at the time of the budget of 2011. Export earnings expanded by 34.6 percent to US$533.1 million.

The report said export earnings from sugar increased by 32.4 percent to US$50.1 million, reflecting a 30.4 percent increase in quantity shipped to 99,738 tonnes.

The Mid-Year Report said that in the first half of 2011, the sugar industry showed tentative signs that the path to recovery has commenced.

“The sector returned a 2011 first crop of 106,871 tonnes, reflecting a 30.5 percent increase over the first crop of 2010 and the best first crop performance since 2004,” the report said.

“The industry continues to emphasize that if workers maximize the opportunity days available for harvesting for the second crop, the [target] of 298,879 tonnes is achievable,” the report said, adding that the recent conclusion of an agreement between the unions and the sugar corporation on wages and salaries for 2011 is likely to be helpful in achieving the target.

It said that rice continued its trend of successful first crops, with the industry coming off a remarkable production performance in 2010. The 2011 first crop was 207,514 tonnes, 23 percent higher than at the corresponding period in 2010, and the highest first crop in the industry’s history, the report said.

The report said that rice export earnings expanded by 35.1 percent to US$92.6 million, mainly attributed to a 26.4 percent increase in average export price to US$551.4 per tone, coupled with a 6.8 percent increase in export volume to 167,945 tonnes.

It said that the performance of the sector is attributable mainly to improvements in drainage and irrigation as a result of government’s investments, the development of new and more tolerant rice strains, higher yields and higher acreage of paddy planted.

Though production in the livestock industry was targeted to remain stable through 2011, the report said that for the first half of the year, overall production levels actually increased by 2.7 percent, with increases in poultry meat, table eggs, mutton and beef, while pork production declined. Fish also suffered a decline in production, having been projected to grow by 0.4 percent.
The report said that in the forest sector, during the first half of 2011, production of logs, lumber and roundwood all contracted, resulting in an overall negative growth in the industry of 30.3 percent.

“Notwithstanding the resumed production of plywood manufacturing operations, sustained international demand for several of Guyana’s traditional species now boosted by the penetration of Guyana’s lesser used species into the international market and attendant improvements in international market prices, the sector is now projected to contract by 19.9 percent by yearend compared to an earlier projected contraction of 1.4 percent,” the report said.

It said in the mining and quarrying sector, bauxite production reached a total of 815,505 tonnes at the half year, an increase of 38.6 percent compared to the same period in 2010. “While both [RUSAL and BOSAI] have posted higher production, the increases came largely from the two lower valued products,” the report said. It said that the projected growth rate for value-added in the bauxite industry is 13.4 percent.

Total gold production in the first half of 2011 was 163,413 ounces, an increase of 14.9 percent over 2010. “With gold prices hovering firmly above US$1,500 per ounce and approaching US$1,800 per ounce in the post mid-year period, there is every incentive to invest and operate in the industry…gold production is now projected to reach 320,000 ounces resulting in an upward revision in the industry’s projection,” the report stated.

It said too, that the average export price of gold witnessed a 29.1 percent increase to US$1,370.3 per ounce, contributing to a 56.4 percent increase in export earnings to US$229.5 million.

The report said expectations for the wholesale and retail sector were exceeded with robust growth of 21.7 percent being recorded for the half year.

Turning to the achievements in the financial sector, the report said that deposits of the private, public and non-bank financial institutions increased during the review period, and led to total resident deposits expanding by 7 percent to $253.2 billion.

It said private sector deposits, which accounted for 77.9 percent of total resident deposits, increased by 8 percent. Private sector credit grew by 6.7 percent and amounted to $119.8 billion at end June 2011.

Last Updated ( Friday, 02 September 2011 04:20 )
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