Positive economic growth recorded in first quarter
THOUGH rattled by the COVID-19 pandemic and a protracted electoral process, Guyana has fared well in the first quarter of 2021, recording positive economic growth, according to the Bank of Guyana in its quarterly report which was released recently.
The exact size of growth recorded by the country is not available at this time, but according to the central bank, Guyana is one of the few Caribbean countries which recorded positive growth in the first quarter.
“Economic performance in the Caribbean was very uneven in the first quarter, with tourism-based economies performing worse than their commodity-based counterparts. Barbados recorded output contraction of 19.8 per cent, its fourth successive quarter of double-digit decline, largely due to its weakened tourism sector.
“However, Guyana recorded positive growth at the end of the first quarter, primarily on account of oil production. The other countries in the region are estimated to have recorded declines as a result of the weaker investment climate, reduced activities in the services sectors as well as decline in trade,” the central bank reported.
The Guyanese economy, unlike others which could not withstand the effects of COVID-19 and other external shocks, continued to benefit from oil production. Crude oil production increased to 11 million barrels at the end of March 2021, as daily oil production increased significantly when compared to one year earlier.
Outside of oil, mixed output performance was recorded in the major sectors, as the non-oil economy is still recovering from the impact of the ongoing COVID-19 pandemic. The agriculture sector recorded increased production of rice, fish and shrimp, sugar, eggs and poultry meat, while the forestry subsector contracted.
According to a breakdown of the performances in the agriculture sector, rice output increased by 79.9 per cent, fish and shrimp by 9.2 per cent, sugar by 0.5 per cent, eggs by 0.4 per cent and poultry meat by 0.1 per cent.
The central bank said rice production soared notwithstanding the adverse weather conditions experienced during the first crop. The fish and shrimp subsector managed to perform favourably despite the many challenges such as piracy and the ongoing COVID-19 pandemic.
In the sugar industry, output increased in the first quarter and was attributed to rehabilitative works at the functioning estates, critical investments in machinery and high workers’ morale during the first crop for 2021. On the other hand, the forestry subsector recorded a 12.3 per cent decline in production for the period under review.
In the mining and quarrying sector, production of sand, bauxite, stone and gold were lower while crude oil and diamond production increased. The bank reported that the mining and quarrying sector recorded lower output of sand, crushed stone, bauxite and gold, which contracted by 82.1 per cent, 37.9 per cent, 33.5 per cent and 17.9 per cent, respectively.
The decline in the gold industry was due to lower declarations by one large scale mining company and the small and medium scale miners by 68.6 per cent and 8.1 per cent, respectively.
Conversely, higher output of 82.8 per cent and 44.8 per cent were recorded for crude oil and diamonds, respectively. The manufacturing sector, like the other sectors, also recorded mixed performances with liquid pharmaceuticals, nitrogen gas, oxygen, paints and alcoholic beverages performing favourably, while there was a decline in production of acetylene, ointments, tablets and detergents.
Specifically, increases were recorded in the production of liquid pharmaceuticals, nitrogen gas, oxygen, paints and alcoholic beverages by 35.8 per cent, 31.8 per cent, 23.3 per cent, 22.1 per cent and 17.5 per cent, respectively.
On the other hand, declines were registered in the production of acetylene, ointments, tablets and detergents by 42.8 per cent, 42.2 per cent, 34.6 per cent and 26.1 per cent, respectively.
The construction sector, on the other hand, recorded positive performance on account of increased public and private construction, while there was increased activities in the services sector, albeit not to pre-pandemic levels, as authorities relaxed some of the COVID-19 measures.
There was increased activity in the wholesale and retail trade and repairs; arts, entertainment and recreation; accommodation and food services; transport and storage, and financial and insurance sub-sectors.
Moving forward, the local economy is expected to build on its performance in the first quarter, as it is projected to record real oil Gross Domestic Product (GDP) growth of 20.9 per cent, while the non-oil economy is estimated to grow by 6.1 per cent.
“This performance is expected to stem from expansions in all the major sectors due to the reopening of the economy as the ongoing vaccination programme continues and the COVID-19 restrictions continue to be lifted. However, the new variants of the coronavirus pose a threat to this outlook, as there is the possibility of another lockdown,” the central bank related.
Notwithstanding, the end of year inflation rate is expected to be 1.6 per cent due to increased economic activities as the economy picks up.
Despite impending challenges, Guyana, with its growing petroleum industry and other lucrative productive sectors, remains on the cusp of economic transformation, with opportunities for growth and development of all Guyanese.
President Irfaan Ali, in his message on the eve of Guyana’s 55th Independence Anniversary, said: “We fought for independence to give our people the quality of life of which they had been deprived. If independence is to have any real meaning, it is to uplift our people from the ravages of limitations of the past, and to give them a better life with better opportunities under better circumstances.”
Every person in the local society, according to the President, now has real economic opportunities to grow and develop, and to contribute to the enlargement of national wealth.