Economy records 6.8% increase in second quarter of 1999 -- Bureau of Statistics
by Terrence Esseboom
GUYANA's economy returned to the path of economic growth in the second quarter of 1999, recording an increase in real output of 6.8 per cent. This was revealed in the recently released Bureau of Statistics `Guyana Half Year Review 1999'. According to the Bureau, this growth compensated for the 2.4 per cent contraction in Gross Domestic Product (GDP) during the first quarter and resulted in an overall growth of 2.1 per cent in the first half of the year, compared to negative growth of 2.4 per cent experienced in the first half of 1998. The review said that good performance in the first half was primarily due to extremely favourable growth in the sugar industry in the second quarter and, to a lesser extent, the rice industry. These occurred simultaneously with marked reductions in activity in other sectors such as Distribution and Engineering and Construction. Growth in other sectors ranged from just over 14 per cent to one per cent. On a year-to-date basis, consumer prices rose by 5.8 per cent while the Guyana dollar depreciated by 7.1 per cent against the United States dollar. Rice Rice harvested at the end of the first half of 1999 amounted to a total of 193,608 tonnes, representing 20,000 tonnes in excess of the target and a 38 per cent improvement on the harvest of the first crop for last year, the review indicated. It added that despite La Nina, the weather conditions were generally favourable for sowing, and the quality of paddy obtained was unusually high. Some adverse effects on the industry did occur due to a shortage of fertiliser and to heavy rains during the first crop. Sugar: Although a 5.7 per cent decrease in the quantity of sugar produced was observed in the first quarter of 1999, the entire first crop for 1999 registered a 125,226 tonnes - according to GUYSUCO's records, the best crop in 13 years. This was 39 per cent higher than last year's first crop, and was described as an exemplary performance in its own right despite the unusually low first crop of 1998. The industry has recommenced high-density planting in an ongoing effort to enhance efficiency in the industry and retain Guyana's place as the largest sugar producer in the Caribbean. Forestry: The 1999 Half Year Review showed that timber produced for the period January to June 1999 against the same period for last year increased by three per cent, from 224,512 cubic metres to 231, 537 cubic metres. Despite this slight movement, the industry still suffers inherent problems due to declining international markets; and as a result, sawmills continue to contract operations. The prolonged public sector strike also affected the sawmills, as they encountered difficulty in clearing inputs from the Customs and Excise Department. Livestock: While egg production in the first half of the year fell by 4.5 per cent, the production of poultry meat rose by 19 per cent. The glut that appeared in the first quarter, partly due to the amount of imported chicken, has caused some farmers to begin cutting back production when faced with declining prices. However, the sector as a whole registered a 14 per cent growth. Mining and Quarrying: The mining and quarrying value index has shown an overall contraction of eight per cent. Both major components - bauxite, and gold and diamond - contributed to the decline. Bauxite Mining: Total bauxite mined has decreased by 13 per cent during January to June compared to the first half of the previous year. The decrease has been reflected in all three of the major categories, with calcined, chemical and metal grade bauxite production falling by 26 per cent and 10 per cent respectively. The bauxite production trend reflects declining markets since production is linked to actual and expected sales. Gold Mining: The total amount of raw gold declared fell by six per cent in the first half of 1999. Declarations by Omai decreased by 13 per cent, although this was offset in some measure by an increase in local declarations of 20 per cent. The industry is being affected by the reduction in the soft rock reserves from which the ore is obtained. This is being further compounded by the actions of world central banks which plan to continue selling large amounts of their gold reserves. And, it was reported that if this continues, it is expected to drive the already relatively low price of gold even lower, to a point where it may no longer be feasible to operate the mines, the Bureau reported. Diamond Mining: The declaration of diamonds rose by 49 per cent compared to the first half of 1998. Overall, the gold and diamond index has declined by six per cent. Manufacturing: The Review showed that the manufacturing index recorded a real growth of 1.6 per cent for the first half of 1999. There were significant increases in production of several items, particularly paints, stockfeed and laundry soap, which offset lower production levels in the other items. Individually, the pharmaceutical and other manufacturing indices grew by three per cent and two per cent in that order, while beverages declined by about seven per cent and food by six per cent. Production increases observed in the first quarter extended into the second half, with notable instances being laundry soap which increased by 218 per cent, paints which increased by 86 per cent, stockfeed which increased by 21 per cent, detergent which rose by 7.6 per cent, and corrugated cartons which grew by 67 per cent. The latter continues to regain its market over the past few years. Decreases in the manufacturing sector impact on items ranging from refrigerators to rum. Rum has declined by 1.3 per cent; beer and stout, 10 per cent; aerated drinks, 12 per cent; and footwear, 62 per cent. The Bureau of Statistics said that in the case of refrigerators there was no production after January mainly because of a shortage of raw materials. Footwear is produced on order, and the decline in the first six months of this year compared with the same period last year indicates a steadily contracting market share. The production of beer is suffering from illegal importation of the commodity from foreign sources, allowing smugglers to undercut the price of the local product by evading customs duties, it was observed. Meanwhile, in the first half of 1999, the production of plywood is just 1.6 per cent less than the amount for the corresponding period in 1998.
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