Economic growth of 2.1% reported for `99 first half -sugar and rice lead the way Stabroek News September 18, 1999 Very favourable performances in both the rice and sugar industries have led to a growth of 2.1% in the Guyana economy for the first half of this year, according to the Bureau of Statistics report for the first half of 1999. The report said that the economy experienced an upturn in the second quarter and recorded a 6.8% hike in real growth. This compensated for a 2.4% contraction in gross domestic product (GDP) during the first quarter and led to the 2.1% overall growth. The performance of sugar and rice reflected a growth rate of 39.1% and 37.7% respectively at the top of the sectoral production chart followed by livestock with 14.7%. The report noted that the performances in the rice and sugar sectors coincided with a marked decline in the distribution, engineering and construction sectors. Growth in these sectors and others such as fishing, forestry, mining and quarrying, transport and communication, manufacturing, rent of dwellings, financial and other services and government ranged from just over 14% to one percent. In the case of rice, the report said that for the first half of the year a total of 101,608 metric tonnes were produced, representing some 20,000 tonnes over the target, and a 38% improvement on the harvest for the first crop for last year. Conditions during the period were favourable for sowing, although during the first crop there were some adverse effects on the industry due to a shortage of fertilizer and heavy rainfall. But rice exports fell from 113,528 tonnes to 110,311 metric tonnes, with the three per cent decline being mirrored in export earnings, which fell by 4.2% from US$35.3 million to US$33.9 million. The report, as regards sugar noted that the first crop produced 125,326 tonnes, according to Guyana Sugar Corporation (GUYSUCO) records, which was the best first crop figure for 13 years. The industry, according to the report, has commenced high density planting in an effort to enhance efficiency. Sugar exports for the period reached the 122,000 metric tonnes mark; 37.5% more than the first half of last year. Export earnings also rose by 40% from US$45 million to US$62 million. The forestry sector figures for the first half of the year showed a three percent increase from 224,512 cubic metres to 231,537 cubic metres. But the report notes that the industry still suffers declining international markets resulting in local sawmills having to continue to contract operations. However, export earnings reached US$16.7 million up from US$16.5 million for the period last year. In the livestock sector, the report observed that although egg production fell in the first quarter of the year by 4.5% the production of poultry meat rose by 19%. It said that the glut that was evident in the first quarter was prolonged in the second quarter partly due to the amount of imported chicken on the market. This forced farmers to cut back production when faced with declining prices. However, the sector as a whole registered a 14.7% growth. The manufacturing sector showed growth of 1.6% for the first half of 1999, recording significant increases in production in the areas of paints by 86%, stockfeeds by 21%, and laundry soap by 218% which offset lower production levels in other items. Areas such as the pharmaceutical industry grew by three per cent while beverages and food declined by seven percent and six percent respectively. The production of refrigerators and rum decreased by 1.3%, beer and stout by ten percent, aerated drinks by 12% and footwear by 12%. The production of beer, the report noted, is suffering from the illegal beer importation. The troubled bauxite industry continues to record poor performances in the categories of chemical, calcine and metal grade bauxite, with production decreasing by 13% for the first half of this year compared to a similar period last year. Production in these areas fell by 65% in the case of chemical grade, ten percent as regards metal grade and 26% in relation to calcine bauxite. Noting that the bauxite index declined by 18.5%, the report said that the production trend reflected the declining markets since production of bauxite is linked to actual and expected sales. The total amount of bauxite exported for the first half was 1,088,540 tonnes compared with 1,216,542 tonnes for last year. The value of these exports fell from US$41.1 million to US$33.1 million as both LINMINE and BERMINE reported a critical fall in demand for their product by international buyers. The story as its relates to gold production was also not very encouraging as the total amount of raw gold fell by six per cent in the first half of this year. The report said that declaration by Omai Gold Mines Ltd decreased by 13% although this was offset in some measure by an increase in the declaration by local miners. "The industry is being affected by the reduction in the soft rock reserves from which the ore is obtained," the report said, adding that this is compounded by the action of world central banks which plan to continue selling large amounts of their gold reserves. It added that if this trend continues, the relatively low price of gold would drop even further to the point where it may not be feasible to operate the mines. Thirty-five thousand, five hundred ounces of gold were exported for the first half of this year compared with 48,600 ounces last year. As a consequence, earnings decreased by 24.6% from US$14.6 million to US$11 million for this year. However,the report noted encouragingly that the production of diamonds rose by 49% compared to the first half of last year. But diamonds exported fell by 19% just over 15,679 to approximately 12,700 metric carats. The report said that Guyana's merchandising trade yielded a surplus of US$39.6 million for the first half of this year compared with a deficit of US$33 million for the corresponding period last year. It said that exports showed a decline in most areas except sugar, timber and shrimp, and that total domestic exports for the first half of this year amounted to US$225 million, 3.4% down from last year. The report also noted that imports decreased due to the non-provision of Customs and Excise services in the second quarter of this year. "Comparing the first half of 1999 with the first half of 1998, there was a fall of 29% from US$262 million in 1998 to US$186 million," the report said. Imports in consumer goods fell by 16%, "intermediate goods" by 33% and imports of capital goods by a substantial 37%. A © page from: Guyana: Land of Six Peoples