Economy slows by 2.5% in first half of 2015

[www.inewsguyana.com] – Guyana has recorded a 2.5% decrease in its economic output for the first half of 2015 when compared to 2014, according to the Mid-Year Report, released by the Ministry of Finance.

According to the Report, at the time of the preparation of Budget 2015, preliminary estimates had indicated the country’s half year growth rate at 0.9 percent. The Report stated however that with the passage of time and the benefits of the actual first half performance in a number of sectors, the country recorded real Gross Domestic Product (GDP) of 0.7 percent in the first half of 2015, with non sugar GDP recording a growth rate of 0.8 percent. The economy recorded overall growth of 3.2 percent in real GDP in the first half of 2014, with non-sugar GDP growing by 2 percent.

The 2015 decline, the report noted, was mainly driven by the delay in the presentation and passage of the National Budget, due to the Parliament being prorogued in November 2014, its dissolution in 2015, and elections being held in May 2015.

“This delay meant that many government agencies were unable to carry out their planned programmes for the year. Many projects were held in abeyance, while only a few projects which were ‘rolled over’ from the previous year attracted funding. At the same time, the atmosphere of uncertainty and tensions surrounding the holding of general elections, led to investors postponing decision in many cases,” the Report stated.

It also noted that with the installation of a new government and the passage of the National Budget, that growth is expected to surge in the second half of the year and is projected to reach 3.4 percent, as a result of the measures outlined in Budget 2015.

Below are the highlights of the different sectors’ performance, in the first half of 2015, compared to the same period in 2014.

• Sugar production grew by 1.6 percent to reach 81, 271 tonnes.
• Rice production in the first half of  2015 was 359,960 tonnes, 15.3 percent over last year’s record high first-half production of 312,283 tonnes
• Production of the other crops’ sub-sectors rose by 5 percent. This was as a result of the on-going support to the sub-sectors.
• Livestock industry grew by 15 percent. This is as a result of growth in poultry, egg, and mutton and milk production.
• The fisheries sector continued its downward spiral, contracting by 11.6 percent. This is as a result of overfishing and possible under-declaration, combined with smaller fleets, lower harvesting in aquaculture, piracy and occurrence of sargassum seaweed.
• The forestry sector contracted by 9.8 percent. This was due partially to unusual May/June rains which created conditions that were not conducive to harvesting.
• The mining and quarrying sector declined by 17.4 percent.  This reflects a fall in gold, bauxite, and stone production by 16.2 percent, 18.6 percent and 54 percent respectively.
• Gold prices continued to fall, reaching a five-year low. This combined with extensive smuggling of gold, estimated to be as much as 15,000 ounces per week, led to a sharp drop in declaration.
• The bauxite industry also experienced declining international prices, which contributed to the 18.6 percent decline in production in the first half of 2015 compared to the same period in 2014.
• Manufacturing output increased by 7.1 percent, driven by a 15.3 percent increase in rice milling as a result of the bumper crop.

The service sector continued to expand, growing by 2.5 percent. This was due to the expansion in all of its subsectors, except construction, which declined by 13.2 percent.