Economy grew by 2 % in first half of 2016 – mid-year report

Georgetown, GINA, August 8, 2016

The growth in the country’s economy, by 2 percent, in the first half of 2016, has been largely attributed to developments in the mining and quarrying sectors, Minister of Finance Winston Jordan told media operatives during the presentation of the country’s mid- year report, today.

For the first half of 2016, the mining and quarrying sectors grew by 65.7 percent when compared to a similar period in 2015. Gold increased 94.3 percent and bauxite by 2.9 percent for a similar period in 2015.

Minister Jordan said other areas of the economy which revealed positive growth were other crops, which grew by 2 percent, livestock by 0.8 percent and fisheries by 2.1 percent.

Revised growth rate

Minister Jordan said that there has been a review of the country’s projected economic growth. This evaluation has seen projected growth being revised downwards to 4 percent from a previous 4.4 percent.

“This is more or less in line with what the International Monetary Fund (IMF) predicted early this year, but is slightly down from our budgeted forecast of 4.4 percent. We are being conservative because we think performance in the other sectors might take us back to 4.4, but at this stage, we are revising growth rate to 4 percent for the rest of the year,” the minister said.

The revised projected growth was necessitated by contractions in the agricultural sector which shrunk by 10 percent as a result of huge shortfalls in sugar, the Minister explained. “Sugar was down 30 percent, rice down 26.2 percent, forestry 13.1 percent,” Jordan stated.

As a result of the decline in rice and sugar production, the manufacturing sector contracted by 14.1 percent, he said.

Outlook good

Notwithstanding the reduction in the two important sectors of the economy, the Finance Minister said,  “the outlook is still good despite the shortfall in rice and sugar in the first half which we are not projecting to be made up in the second half because  it would be sort of offset by the substantial increase in production in gold.”

At the time of budget 2016, gold was projected to produce 550,000 ounces. Minister Jordan said the latest projection is now at 650,000 ounces.

By the middle of this year, Canadian company, Guyana Goldfields’ Inc., alone, at its Aurora mines had already poured about 76,000 ounces of gold.

Addressing other economic indicators, the Finance Minister said, “Balance of payment has improved to a surplus of US $12.1 million from a deficit of US $58.1 million for a similar period last year. At the same time our reserves are healthy. These have been up to US $634.6 million from US$ 626. 09 million for the same time last year.”

While the country’s economy experienced a period of deflation in the last year, the first half of 2016 has seen an inflation rate of 1.1percent. “Credit to the private sector has increased by 3.9 percent, pushed by personal lending, which went up by 19.3 percent and mortgage lending which went up by 4.9 percent,” Minister Jordan said.

Revenue collection

The Minister credited the country’s overall fiscal surplus being cut in half from 17.9 billion in 2015 to 8.8billion this year, to an increase in revenue collection. “Revenue collection has increased by 9.7 percent at the first half of the year,” Jordan explained.

Despite a low rate of implementation of Public Sector Investment Programmes, relative to budgeted allocations, the country’s capital expenditure increased by 89.4 percent.  “As at June our rate of implementation was just over 25 percent,” the minister said.

“It’s the first time that the mid-year report will be presented to parliament before the recess. This is an accomplishment in keeping with this government’s mantra that we will improve transparency and accountability in government,” said Minister Jordan.