GDP growth of 2.2 %, a positive indicator – Minister Jordan

DPI, Guyana, Tuesday, August 15, 2017

The 2017 Mid-year growth of 2.2 percent of Guyana’s economy should be regarded positively according to Minister of Finance, Winston Jordan. Speaking at a press conference Monday at his office, the Finance Minister stated that it should be so regarded particularly in light of regional economic developments, “You may hear talk of anemic growth or other negative comments but when our neighbours can’t even manage a 0% much less positive growth, 2.2% is not to be scoffed at.”

Admitting that the increase might be marginal, Minister Jordan observed, “It is not a decline which means that there is still spending. This spending is expected to increase as citizens become more confident and government policies will lead to sustained growth rather than be a “one off.” He posited that local spending is directly correlated to the performance of the agricultural sector particularly rice and sugar and with the latter’s underperformance spending is affected “if only because of the number of people employed directly and indirectly in those areas.”

According to the Mid-year report sugar production was 49,606 tonnes, compared to 56,645 tonnes for the same period last year, a drop of 12.4 percent. The shortfall was described as being due to Skeldon Estate’s lack of production, due to unsafe boilers and the need for significant repairs. The Finance Minister noted that if it were not for sugar’s poor performance, the economy would have passed the 3.8 percent growth initially projected, “due to the poor performance of this sector projected growth has been reduced to 3.1percent.”

The privately controlled rice industry performed creditably as government-assisted efforts to secure new markets, helped to boost sales. In the first half of the year rice production totalled 349,867 tonnes, a 31.6 percent increase over the same period in 2016. Also helping to boost the sector’s performance was an increase in acreage sown, particularly in Region Five where here was a 30 percent to 42,595. New markets in Mexico could potentially result in over $1 billion of exports, and Cuba’s is projected at 15,000 tonnes.

The industry was seriously affected, the minister explained, by the collapse of the Venezuelan PetroCaribe contract, but while efforts to reverse this are gaining traction, “It will take a lot longer to get sugar righted.” He emphasised however, “When we do it will not be like the halcyon days in the 1970s when 385,000 tonnes were produced. When sugar stabilises we will be seeing something like 150,000 tonnes. We will be spending far more money to produce far less.”

The mid-year report explains that the retention of sugar workers will be paramount, during this rationalisation process of that sector ‘with some lands being leased to workers in order to facilitate their engagement in other agricultural pursuits.

The second half of 2017 will see preparations for the divestment of the Skeldon estate; Wales and Uitvlugt estates will be amalgamated and farmers reassigned to the Uitvlugt factory; Albion and Rose Hall estates will also be amalgamated’.

Recapping the performance of several years past, the minister said that due to the rice industry’s performance in 2015, GDP was 5.8percent. This figure “plummeted by 2014 to 3.8 percent. By time the election year, 2015, came around growth had plummeted further to 3.2 percent”

 

By: Paul Mc Adam