Production, Aggregate Expenditure, Employment and Inflation

PRODUCTION, AGGREGATE EXPENDITURE, EMPLOYMENT AND INFLATION Taken from the Bank of Guyana Annual Report 2014

The Guyanese economy continued to register broad-based real economic growth of 3.8 percent, albeit at a slower rate, following the 5.2 percent in 2013. Growth reflected higher sugar, rice, forestry and manufacturing output; as well as expanding activities in the services sector. The urban inflation rate was 1.2 percent at end-December 2014, reflecting moderate increases in food prices. Strong domestic supply, easing of commodity prices
and relatively stable interest and exchange rates contributed to restrain any inflationary pressures on the real economy.

GROSS DOMESTIC PRODUCT (GDP)

Real and nominal output expanded by 3.8 percent and 3.4 percent respectively. Growth was attributed mainly to stronger sugar, rice, forestry and manufacturing output as well as expanding activities in the services sector, mainly the construction and transportation & storage sub-sectors. The output of gold, bauxite, fishing as well as wholesale & retail trade activities experienced drawbacks. In terms of the sectoral composition of real GDP, the agriculture sector contributed 22.8 percent; marginally higher than 22.1 percent at end-2013. The services sector’s contribution increased to 66.5
percent from 65.2 percent at end-2013. The manufacturing sector’s contribution (excluding sugar processing and rice milling) was lower at 3.9 percent during the review period. The mining sector’s contribution was lower at 10.6 percent compared with 12.1 percent at end-2013.

PRODUCTION

Agriculture, Fishing and Forestry The agriculture sector (including sugar processing and rice milling) experienced an upsurge of 7.4 percent relative to the 2013 position of 3.5 percent. This performance was attributed to favourable weather conditions and an improvement in
productivity.

Sugar

Sugar output increased by 15.8 percent to 216,192 tonnes and was 100.1 percent of the upward revised targeted amount of 215,910 tonnes. This outturn was due to better supply of
quality cane, fewer industrial unrest and improved weather conditions. Output was higher in the first half of 2014 at 79,995 tonnes, an increase of 66.5 percent while output declined, in the latter half, by 1.9 percent to reach 136,197 tonnes.

Rice

Rice output increased by 18.6 percent to 635,238 tonnes, which was 107.3 percent of the upward revised targeted amount of 591,892 tonnes. This outturn was on account of adequate and better seed varieties, improved research and extension services, higher private sector investment in machinery and equipment as well as additional land for cultivation.
Acreage sown increased from 165,461 hectares in 2013 to 185,389 hectares in 2014. In the first half of 2014, output of rice was 18.3 percent more than the 2013 level. Acreage sown increased by 11.2 percent to 90,793 hectares compared with 81,628 hectares in 2013. Similarly, during the second half of 2014, production increased by 18.9 percent to 322,955 tonnes, which was 50.8 percent of the overall production. Acreage sown increased by 12.8 percent to 94,596 tonnes. 

Fishing and Livestock 

The fishing sub-sector fell by 25.0 percent in real terms. The amount of fish and shrimp catches declined by 22.0 percent and 24.0 percent respectively, due to piracy and overfishing in offshore waters. The livestock sub-sector continued to improve, registering growth of 3.1 percent at end-2014. This position was on account of significant increases in the output of beef by 17.9 percent. Additionally, egg production increased by 27.9 percent, resulting from the increased importation of broiler eggs and egg layers. In contrast, the output of pork, mutton and poultry meat by fell by 9.1 percent, 4.4 percent and 2.9 percent respectively. 

Forestry 

Output of total logs, plywood and roundwood increased by 33.4 percent, 16.3 percent and 19.2 percent respectively, attributing to increased logging activities, owing to favourable weather conditions as well as higher demand for wood products. Conversely, sawnwood production recorded a decline of 8.9 percent during the review period.

Mining and Quarrying

The mining sector contracted by 11.5 percent in real terms, on account of lower gold and bauxite output. This outturn was on account of relatively less favourable gold and bauxite
prices.

Bauxite

Bauxite production decreased by 8.7 percent to 1,563,563 tonnes, and represented 85.3 percent of the downward revised targeted amount of 1,833,169 tonnes for 2014. This outturn was on account of Metal Grade (MAZ) and Calcined Grade (RASC) bauxite declining by 15.1 percent and 7.2 percent respectively, spun from lower international demand.
Conversely, output of Chemical Grade (CGB) increased by 35.3 percent.

Gold and Diamonds

Total gold declaration declined by 19.5 percent to 387,508 ounces or 86.1 percent of the downward revised targeted amount of 450,000 ounces. This performance was attributed to a contraction of small and medium scale production, owing to lower international prices during the year. Bauxite production decreased by 8.7 percent to 1,563,563 tonnes, and represented 85.3 percent of the downward revised targeted amount of 1,833,169 tonnes for 2014. This outturn was on account of Metal Grade (MAZ) and Calcined Grade (RASC)
bauxite declining by 15.1 percent and 7.2 percent respectively, spun from lower international demand. Conversely, output of Chemical Grade (CGB) increased by 35.3 percent.
The diamond industry experienced a surge in declaration by approximately 56.3 percent to 99,950 mt. ct. on account of higher international price.

Manufacturing

The manufacturing sector (excluding sugar processing and rice milling) recorded real growth of 5.5 percent compared with 5.4 percent recorded in 2013. This outturn was partly due to increased output of alcoholic beverages and pharmaceuticals. The beverage industry recorded an increase in alcoholic beverages by 8.8 percent due to higher outdoor social and sporting events. Non-alcoholic beverages fell by 6.7 percent due to lower demand. The pharmaceuticals’ industry experienced mixed performances with higher output of ointments and tablets by 24.6 percent and 23.0 percent respectively, owing to higher domestic and international demand while output of liquid pharmaceuticals fell by 17.6 percent. Moreover, the output of oxygen and electricity increased by 13.0 percent and 0.8 percent respectively while paints declined 0.7 percent.

Services

The services sector, which accounts for more than half of the Gross Domestic Product, recorded 5.6 percent growth. This outcome was credited to positive performance of construction, transportation & storage, information-communication, financial & insurance sub-sectors, and real estate activities, which exhibited growth of 18.0 percent, 14.4 percent,
3.8 percent, 1.2 percent and 6.0 percent respectively. Moreover, education, public administration, health & social services and electricity & water expanded while wholesale & retail trade contracted. The construction industry continued to grow by 18.0 percent in 2014 following a 22.6 percent expansion in 2013. This outturn stemmed from strong private
expenditure in new housing schemes and commercial construction projects.

The transportation & storage sector expanded by 14.4 percent, due to increased activities and mobility in the transport (domestic air and ferry passenger services) industry. The information and communication sector recorded growth of 3.8 percent, stemming from the continuous enhancement in activities of the communication industry. Real estate activities grew by 6.0 percent as a result of the growing housing market. Financial and insurance activities expanded, albeit at a slower rate of 1.2 percent, at end-December 2014 compared to 11.2 percent increase in 2013. This performance was attributed to improvement in access to financial services and increased private sector credit of 9.1 percent. The wholesale & retail industry contracted by 3.0 percent due to lower demand for imported goods, particularly consumer and intermediate goods.

The information provided above is an exert from the Bank of Guyana Annual Report 2014

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