By Ariana Gordon

BUOYED by a sterling performance in the mining sector, the local economy has recorded a 2% growth over the past six months, and is expected to post a growth rate of approximately 4% at the end of the year, despite low returns in rice and sugar.Finance Minister Winston Jordan has disclosed that he is pleased with the overall performance of the sectors, on Monday hailing the mining and quarrying sector by saying that it has performed “very good”; while noting that economic growth in the first half of the year reached 2 per cent, substantially above the 0.9 per cent (revised from 0.7 per cent) growth rate achieved during the same period last year.

“The performance of the economy in the first half (of the year) was buoyed by growth in the mining sector, particularly as a result of increased production of gold, as well as growth in some of the services sector,” the Mid-Year Report stated.

Production in the gold industry reached 322,493 ounces during the first half of 2016, an increase of 94.3 per cent over the same period last year. It is believed that “improved oversight of concessions to the sector was among factors that contributed to an increase in output.”

The report, tabled in Parliament on Monday, detailed that production levels for small and medium scale miners increased by 26.2% in the first half of 2016, compared to production for the same period in 2015.

Additionally, with the improved international price for gold combining with the two new gold companies reaching full capacity, enhanced production levels are expected in the second half of the year, the Mid-Year Report stated. Gold production for the year is expected to be at an all-time high, rising from the budgeted 450,873 ounces to a projected 650,000 ounces.

GDP at 4%
Minister Jordan disclosed that the country’s Gross Domestic Product (GDP) is likely to increase to 4 per cent, as projected by the International Monetary Fund (IMF), instead of the original projection of 4.4 per cent. This decline in the projected GDP is as a result of the disappointing performances in rice and sugar.

“The outlook is still good. Because of the shortfall in rice and sugar in the first half, which we are not projecting to be made up in the second half, (it) would be sort of offset by the substantial increase over budget by gold,” he said before the tabling of the 2016 Mid-Year Report in the National Assembly on Monday.
Agriculture
The agriculture, fishing and forestry sectors have contracted by 10 per cent, despite growth in the livestock, other crops and fishing subsectors. Sugar production for the first half of the year stands at 56,645 tonnes, or approximately 30 per cent below production at the same period last year.

“This shortfall in production was mainly due to the severe El Nino dry spell from September 2015 to April 2016, which affected the growth of the ratoon canes; which in turn resulted in lower yields,” the report stated.

The El Nino weather phenomenon, combined with the Guyana Sugar Corporation’s (GuySuCo’s) inability to irrigate the fields, along with delays in the acquisition of fertilizers and fertilizer applications, affected the quality of canes harvested. Due to the shortfall, the sugar industry’s target for 2016 has been revised to 218,188 tonnes, down from the budgeted 231,145 tonnes.

Rice
Like sugar, growth in the rice industry also declined during the first half of the year; with production recorded at 265,818 tonnes, a 26.2 per cent decline compared to the same period last year. As was the case in the sugar industry, the El Nino dry weather was the main cause for reduced production levels, as it resulted in poor yields and a loss of 3,312 hectares of paddy.

Farmers suffered from additional losses due to the arrival of the rainy season just as they were about to harvest paddy, and delayed payments from millers also resulted in farmers suffering losses.

Other crops
Notwithstanding the effects of El Nino on the rice and sugar industries, the other crops sector grew by 2 per cent in the first half of the year. This sector is expected to improve its performance during the second half of the year.

The Livestock industry grew by 0.8 per cent, and it is expected that in the second half of the year the industry would expand, given the expanded production of poultry, meat and eggs that would occur in Regions 7 and 8 utilising the Black Giant Poultry Initiative, which could lead to greater productivity of chickens.

Similarly, the fisheries sector grew by 2.1 per cent during the first half of the year, as compared to the same period last year. “However, the sector continues to be affected by sustainability issues due to overfishing, but Government is taking steps to address the problem by reducing illegal and unregulated fishing,” the report said.

Forestry
Compared with the same period in 2015, the forestry sector contracted by 13.1 per cent during the first six months of 2016. The Mid-Year Report said many of the concessions issued by the Guyana Forestry Commission (GFC) were not fully operational. It is, however, anticipated that the latter half of the year would see operators fully mobilized and achieving an increase in production comparable to the first half of the year. Mobilization of labour and equipment began late in the second quarter.

“In spite of the contraction, the sector is still projected to grow by 2.5 per cent in 2016, as relatively dry weather conditions allow for improved access and increased operations,” the report said.

Mining
The Bauxite industry has performed creditably thus far, with production in the first half increasing by 2.9 per cent to 760,689 tonnes, as compared with 746,824 tonnes produced last year.
As a result of the better-than-expected performance and recovering prices, production of bauxite for 2016 has been revised to 1,860,747 tonnes, upwards from the budgeted 1, 526,467 tonnes.

The other mining and quarrying sector grew by 13.9 per cent during the first six months, and this was mainly driven by a 16.7 per cent growth in the diamond industry. “Although the growth in the diamond industry was strong, it was weaker than the growth rate of 97.9 per cent a year ago, when there was some inter-industry shifting from gold to diamond, mainly due to the low gold prices in 2015.”

It should be noted that the sand and stone sub-categories of the sector performed “less creditably than diamonds.”

Manufacturing
The manufacturing sector contracted by 14.1 per cent during the first half of the year, due to the decline in the output of rice and sugar. “There were some bright spots in the sector, however, as production increased for products such as rum, stockfeed and pasta,” the report stated. Other manufacturing declined by 3 per cent as a result of reduced production of pharmaceuticals and aerated beverages.

Notwithstanding the overall performance, many of the smaller industries within the services sector performed “creditably” during the first half of 2016.

The financial and insurance industries grew by 5.9 per cent, and the electricity and water industries grew by 8.1 per cent.

“The positive growth performances in the mining sector and some services sub-sectors served to partially offset the below-par performances of the agriculture, construction, and wholesale and retail sectors. As a result of the overall growth, projection for 2016 has been revised downwards to 4 per cent from 4.4 per cent projected in Budget 2016,” the Report said.