On the heels of a report by Guyana Times, the Government has admitted that Guyana’s macro-economic outlook for 2017 turned out to be worse than projected, with a 2.1 growth rate being recorded.
Finance Minister Winston Jordan holds up a copy of the report which, confirmed low economic growth
Finance Minister Winston Jordan made this admission during his first press conference for the year on Friday at his Ministry. Revealing that the 2017 end of year economic report has been completed, he linked the dismal figures to sectors including sugar.
Guyana’s last best growth rate was 5.2 per cent in 2013. World Bank records show Guyana’s growth rates in 2014 was 3.8 per cent, 2015 3.2 per cent, and 2016 3.3 per cent.
“The economy did not perform as robust as we expected during last year,” the Minister admitted. “Even at the half year we were predicting that the economy would not, given what we knew about sugar. At the end of the day, it was even worse than we predicted. So even though there was positive growth last year, the growth rate ended up being 2.1 per cent.”
“Sugar, we had budgeted at 208,000 tonnes, came in at only 137,307 tonnes. Bauxite again did not do quite well. We had budgeted 1.7 million tonnes. Bauxite came in at 1.4 million. Gold (was a) major disappointment. We budgeted at 694,000 ounces. It came in at 653,674 ounces.”
Rice did produce positive figures, with the Minister reporting that from a target of 600,000 tonnes, rice was recorded at 630,104 tonnes. Having budgeted for 318,000 cubic metres, forestry recorded 349,900 cubic metres. Jordan noted that this is better than previous years. And in terms of fiscal performance itself, the deficit to Gross Domestic Product (GDP) has actually decreased; a positive indicator. According to Jordan, the overall state of the economy is nothing new.
“I think I’ve been quite open with you about this economy, in the sense that this economy has not changed much in over 50 years, depending on one or two products, which depends on what prices are. One day you’re up when gold is up, one day you’re down when bauxite is down.”
“Our critical sectors have always depended on some grandfather, that grandfather being some protectionist market. In the case of sugar, that grandfather being the [African, Caribbean and Pacific Group of States] ACP markets. In the case of rice, rice has always had some kind of grandfather market,” Jordan explained.
Previously, Jordan had said the economy was expected to grow by 2.9 per cent, failing to meet the revised growth projection of 3.1 per cent for 2017. The initial projected growth of the economy was 3.8 per cent. This was, however, revised by midyear to 3.1 per cent after the economy only grew by 2.2 per cent by July.
State of the economy
The Finance Ministry’s half year report was released in July of last year. It had showed contractions in certain sectors, when compared to the corresponding period in 2016. The declining sectors had included sugar, livestock, forestry, mining and quarrying and even the bauxite industry.
It showed that sugar production was recorded at 49,606 tonnes at the half year and when compared to 56,645 tonnes during the first half of 2016, represented a decline of 12.4 per cent. The livestock industry also contracted by 10.9 per cent in the first half of 2017, due to heavy rainfall severely affecting production, especially in the second quarter.
The forestry industry also showed an 18.2 per cent contraction in the first six months of 2017, compared to the same period in 2016. Declining production within the forestry industry was due to structural changes in the industry.
The mining and quarrying sector contracted by 4.0 per cent, during the first half of 2017. Gold production fell by 1.7 per cent to 317,096 ounces, in the first half of 2017, compared to the same period in 2016. Also, it showed the bauxite industry declined by 11.5 per cent, as a result of reduced production of higher valued grades.
This was due to poor weather combined with mechanical issues at one of the mines. However, production of metal grade bauxite (MAZ) increased by 97,016 tonnes or 21.3 per cent, the report had stated.
