Economic sectors show uneven performances – Bank of Guyana
– bauxite, gold sectors down by over 20%
The Bank of Guyana has found that Guyana’s major productive sectors showed uneven performances for the first quarter of the year. While on the one hand, forestry showed good performances, critical industries like gold and sugar took a beating.
This is according to the Bank of Guyana’s recently released first-quarter statistical bulletin. In the bulletin, it showed that sugar experienced a major decline of 34.3 per cent, owing to the restructuring process the Guyana Sugar Corporation is undergoing.
On the other hand, the decline of rice output by 9.3 per cent was attributed to rice bug infestation and the increased costs of production.
The mining and quarrying sectors exhibited lower production. According to the bulletin, there was a 4.9 per cent decline in gold declarations. The Bank cited particular mining companies. Troy Resources output declined by 40.4 per cent, while Guyana Goldfields showed slight increases.
One of the worst-hit sectors was the bauxite industry, which contracted by 24.4 per cent in terms of production. The Bank attributed this to industrial unrest at the Russia-owned bauxite company, RUSAL.
Earlier this year, 61 workers downed tools against RUSAL’s subsidiary, the Bauxite Company of Guyana Incorporated (BGCI). This came after they received a one per cent salary increase. Thirty other workers were subsequently dismissed.
At the time, the company also temporarily closed a section of its operations as a result of the strike. The impasse had to be mediated and the workers were reinstated, but not before hours of downtime impacted production.
Meanwhile, the Bank also noted that Guyana’s construction sector experienced increased public and private investments, buoyed in part by the activities in Guyana’s burgeoning oil and gas sector.
“The outturn in the services sector was reflective of activities in the real estate and storage subsectors. Preliminary estimates suggest that the activities of the petroleum industry have capitalised economic activities, particularly in the construction and services sectors during the first quarter of 2019.”
“The performance of the manufacturing sector was mixed with increased production of ice cream, margarine and non-alcoholic beverages while there was decreased output of oxygen, liquid pharmaceuticals, acetylene and nitrogen gas,” it said.
When it comes to the balance of payment, things have actually improved. This publication had reported earlier in the year that in 2018, the balance of payment deficit was US$132.2 million, a 90 per cent deterioration from 2017 when it was at $69.5 million.
According to a previous Bank of Guyana report, the current account deficit worsened to US$679.7 million in 2018 from a deficit of US$297.2 million in the previous year. Singh’s stated principal reason for this is the state of the export sector.
The report stated that exports declined by 4.4 per cent. This is an equivalent of US$63.6 million to US$1373.8 million. The report explained that revenue from sugar, rice, timber and gold declined by 44.1 per cent, 7.5 per cent, 6.9 per cent and 6.2 per cent respectively. Both the decline in exports and the average export price was cited in the case of sugar.
According to the 2019 quarterly bulletin, however, “the overall balance of payments recorded a lower deficit of US$71.2 million at the end of March 2019 compared to US$94.0 million for the same period last year. This was primarily due to a higher capital account surplus. The capital account surplus resulted from increased foreign direct investments mainly on account of the oil and gas sector at [the] end [of] March 2019.”
Balance of payment statistics is data on a country’s fiscal transactions, including imports and exports. To record a deficit, Guyana would, therefore, have had to spend more on imports, among other things, that is derived from exports.