Guyana’s growth performance to be revised downwards

Country’s growth performance to be revised downwards

December 19, 2014 | By | By Leonard Gildarie

– rice, sugar steady shaky GDP as gold unable to reach projections

With just 12 days remaining in the year, and as gold declaration continue its shockingly dismal trend, Government is preparing to revise its growth figures downwards. That is because declaration is unlikely to even reach the 400,000-ounce mark, affecting overall projections set by Government at the beginning of the year.

However, record-breaking rice and an improving sugar have been the saviours, helping to buoy an conomy that is keeling from the fallout, Ministry of Finance officials said on December 18..
Government had targeted 484,562 ounces for 2014. Last year, despite falling prices on the world market, the country recorded 481,000 ounces in declared production by miners.

The first half of 2014 witnessed a 24.6 percent contraction in gold exports earnings to US$226.7M, associated with a 10.1 percent decline in export volume to 182,411 ounces.
Government, as a result, revised its target down to 450,000 ounces.

According to Gold Board and other Government officials yesterday, a more realistic target will be between 385,000 – 390,000 ounces.

Gold production has been monitored by nervous officials, especially as the metal has been the biggest earner in recent years for the economy, helping overall growth levels to remain steady.
Last year, as the US economy started gaining traction, gold prices fell from a US$1900 per ounce to around US$1200. But despite this, Guyana still managed to break production records.

Government had been banking on the tide to continue this year but the price fall started to take effect as cash flush miners dug into profits to keep their operations afloat. Several of the big miners have already cut back on their number of dredges in operation, sending home workers as fuel prices remain relatively high, despite a reduction on the world market. Equipment seizures from miners by dealers have increased dramatically, reports said.

However, the situation has been somewhat rescued by the performance of rice and sugar.
The adjusted Gross Domestic Product (GDP), which Government uses to measure development, had been adjusted to 4.5 percent by the Ministry of Finance, as indicated by the half-year report.
According to Ministry of Finance officials, this is likely to be adjusted downwards again. But the good news is that Guyana will still record positive growth this year.

Rice production has surpassed a record 633,000 tonnes with export earnings likely to meet US$250M this year, Minister of Agriculture, Dr. Leslie Ramsammy, announced recently.
Some 500,000 tonnes of rice is likely to also be exported this year to Venezuela, CARICOM countries, the US and Europe. The excellent showing, according to the Guyana Rice Development Board, has been because farmers have been learning how to increase production per acreage, through better fertilizing methods.

Sugar also, despite its failings in recent years, has also been heartening. With hours left before the estates in Demerara and Berbice stop their mills for the year, the Guyana Sugar Corporation (GuySuCo) is nearing its 216,000 tonnes target. This is far better than the 23-year low of 187,000 tonnes the industry experienced last year.
Despite the low prices this year, the higher production has helped to prop the economy, Government officials said yesterday.

During the first half of this year, Government reported that the economy recorded overall growth of 3.2 percent in real gross domestic product, within which non-sugar GDP grew by two percent.
As a result of gold contraction, overall receipts from exports for the first half of this year fell by 10.3 percent to US$534.2M, compared to the corresponding period in 2013.

During the same period, internal revenue collections amounted to $30.2B, an increase of 4.5 percent over the corresponding period in 2013.
Earlier this week, in what was unthinkable last year, Government announced that agriculture is set to overtake mining and logging as the top earning sector

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