Guyana’s economic growth this year is expected to drop to 4.5 percent due to a decline in gold declaration, driven largely by a slump in the international price for the precious metal, Finance Minister, Dr. Ashni Singh said Saturday.
He said the economy was now projected to record a 4.5 percent overall growth in 2014, down from the 5.6 percent that had been forecast in the 2014 National Budget. Non-sugar growth is forecast at 3.6 percent. “The only sector is doing less than we had anticipated is gold. It’s more the gold than anything else,” he said.
In the half-year report, he observed that the world market price for gold remained low compared to recent years, even though it increased by 4.4 percent to US$1,279 per ounce during the first six months of 2014.
The Finance Minister added that projected end of year gold declaration has been revised downwards to 450,000 ounces or a 6.5 percent decline, while bauxite value added is projected to contract by 6.1 percent
Singh said gold declaration contracted by 17.2 percent at the half year and gold exports declined by 24.6 percent to US$226.7 million for the first six months of this year.
Except for gold, total exports grew by 4.3 percent to US$307.5 million in the first half of 2014.
The Finance Minister explained that of the 3.2 percent real Gross Domestic Product (GDP) growth for the first half of 2014, non-sugar GDP grew by two percent.
In terms of sugar, he observed that 79,995 tons produced during the period under review was 66.5 percent above the 2013 production figure. The 2014 first crop target was lower than that for the same period in 2013.
Under the period of review, the Finance Minister said sugar exports returned US$34.4 million in earnings, a 26.4 percent increase.
Government is also crediting the positive economic growth during the first six months of 2013 to a rice production boom of 312,283 tonnes, 18.3 percent over last year’s record high first crop of 263,868 tonnes. Export earnings from the grain were US$95.6 million, 14.9 percent higher than at June 2013.
The forestry sector recorded robust growth of 38.1 percent, supported by the introduction of new incentives to harvesters. Timber export earnings rose to US$21.3 million, a 31.3 percent increase. verall, manufacturing output grew by 11.2 percent driven by increased levels of production for sugar and rice.
The Finance Minister further reported that the construction sector recorded an extremely strong 16.8 percent growth reflecting both public and private sector activity. Wholesale and retail, information and communication, and financial and insurance activities recorded growth of 6 percent, 3.5 percent and 2 percent respectively.
In terms of the overall balance of payments, the said deficit was reduced to US$93 million, compared to US$145.6 million at half year 2013.4
The Finance Minister also reported that net domestic credit by the banking system to the private sector grew by 2.9 percent and Credit growth was driven cy the mining, construction & engineering and real estate sector which expanded by 10.3 percent, 7.6 percent, and 7.5 percent, respectively.
Credit to rice milling, other services and manufacturing also expanded by 6.4 percent, 5.4 percent and 4.9 percent, respectively.
The consumer price index has declined marginally from the December 2013 level by 0.4 percent, reflecting continued stability in major commodity prices in the domestic marketplace. The non-financial public sector recorded a surplus of $1.7 billion after grants in the first half of 2014. As at end June 2014, Guyana’s total external public debt stood at US$1.23 billion which was 1.6 percent lower than at the end of 2013.
At the end of June 2014, Guyana’s domestic debt stock stood at US$422.7 million which was 11.8 percent below the end 2013 position.