|The performance of the drivers of any economy illustrates the “big-picture” of a country’s wellbeing. In fact, a single indicator or a small set of indicators attempts to give you an idea of the overall economic health of a particular sector as well.|
Reports in this regard are tremendously useful because it can aid investors in assessing whether fiscal markets are in line with monetary brass tacks or if there’s a disparity.
Towards this end, the Ministry of Finance recently released its latest monthly update on some of the important developments within Guyana’s economy. The sectors covered in the report are Real, Fiscal, Monetary and External.
It also provided an update on the forecast of key economic variables within Guyana’s economy.
In 2015, it was noted that Guyana’s economy grew by 3 percent, 0.4 percentage points lower than the budgeted economic growth. This lower-than-projected growth was attributed to declining growth in the forestry, construction, bauxite and fishing sectors. Positive growth rates were observed for the sugar, rice and livestock industries, as well as the manufacturing sector.
Medium term economic growth has been revised upwards to 4.1 percent, as business and consumer confidence is gradually being restored. The major drivers of medium term growth are expected to be the gold and construction industries.
It was noted that Sugar production totaled 16,743 tonnes for 2016 thus far, which signals an increase of 6.9 percent over last year’s total for the same month. Sugar production for 2015 amounted to 231,145 tonnes compared to 216,186 tonnes in 2014. Production growth for 2015 was underpinned by improved productivity and efficiency in the industry as the Government aims to restore viability of the industry.
Rice production for December 2015 totaled 6,267 tonnes, more than double the amount collected for December 2014. This resulted in rice production totaling 687,784 tonnes for 2015, 8.3 percent above its 2014 level.
Despite unprecedented levels of production for 2015, production in the industry is expected to decline in 2016 due to the El Nino phenomenon, combined with uncertainty about export markets.
Forestry production for December 2015 totaled 96,026.4m3 , an increase of 61.2 percent over the December 2014 level. Despite this significant increase in December, total forest production for 2015 amounted to 427,351m3 , a reduction of 14.2 percent over the level achieved in 2014. The significant decline in the forestry industry in 2015 was due to the declining construction industry combined with low international prices.
Fish and shrimp production for December 2015 totaled 1,341 and 2,107 tonnes, respectively. This represents a decrease of 25 percent for fish production compared to its December 2014 level and an increase of 34.5 percent for shrimp production, compared to its December 2014 level. Both fish and shrimp production declined by 20.6 and 41.5 percent respectively for 2015, compared to the levels achieved in 2014. Declining production in this sector continues as a result of overfishing, piracy and low productivity.
Egg production for December 2015 totaled 1,222,000 while poultry production totaled 2,356.8 tonnes. This resulted in production increasing by 13.8 and 7.9 for eggs and poultry, respectively, compared to the levels achieved in 2014.
Bauxite production for December 2015 increased by 12.3 percent, compared to its December 2014 level. Despite this, production for 2015 amounted to 1,503,191 tonnes, a reduction of 3.9 percent, compared to the level achieved in 2014. Production in the bauxite industry increased since August 2015, compared to its previous year values. Nevertheless, it was insufficient to increase overall production in 2015. The industry is expected to improve in 2016 as productivity gains from the closure of a processing plant is expected to be realized.
Gold production totaled 70,834 ounces in December 2015, a significant increase over its December 2014 level of 38,021 ounces. Total gold production for 2015 amounted to 451,058, an increase of 16.4 percent over the production recorded in 2014, for the same period. Investment by Guyana Gold Fields and Troy Inc remain lucrative, despite falling world market prices for gold.
The majority of the industries within the services sector performed creditable in 2015, except for the wholesale and Retail Trade and the Construction Industry. The Construction industry declined by 10 percent, as a result of a significant decline in the Public Sector Investment Project (PSIP) combined with a reduction in the imports of building materials, while the Wholesale and Retail Trade industry declined marginally due to low business and consumer confidence. Significant growth was observed for the Information and Communication sector along with the Finance and Insurance sectors.
Imports and Exports
In December 2015, Guyana ran a trade surplus of US$ 5.58 million, after running of deficit of US$ 11.18 million in November, as exports increased more than imports. It was the second monthly trade surplus in 2015.
In October of that year as well, Guyana ran a surplus of US$ 8.95 million. Exports in December 2015 were up 19.86 percent compared with exports in December 2014.
Imports fell 8.61 percent over the same period. The monthly growth in exports largely reflected large increases in sugar and gold exports. Sugar exports jumped from US$ 5.87 million in November to US$ 17.49 million in December.
Sugar exports increased to the European Union, United States, and Caricom. Gold exports increased from US$ 35.9 million in November to US$ 75.03 million in December.
Exports by the Guyana Gold Board for about half of the increase; the Guyana Gold Board had no reported gold exports in November. Rice exports fell 28 percent, to US$ 14.42 million in December, after a strong month in November. Imports rose in almost all categories. After a low month in November, imports of fuel and lubricants rebounded to near their October level, rising 25.3 percent from US$ 21.95 in November to US$ 27.51 in December.