…overall export earnings plummet as economy slows down
With news of Bai Shan Lin’s massive exportation of logs from Guyana without a permit, the Finance Minister, yesterday announced a massive increase in growth by the forestry sector.
According to Dr. Ashni Singh, this sector has grown by 38.1 percent, and as a result, the 2014 growth target has been revised upwards significantly from the budgeted 3.3 percent to 15 per cent.
This would mean that the forestry sector is expected to produce five times more than was initially projected.
Dr. Singh also reported yesterday that government will continue to spend money which had been voted down by the political opposition.
According to the Finance Minister, Government’s recourse to restore allocations for spending, did inevitably witness some delay in programme implementation but the implementation of Budget 2014 continues apace.
Dr. Singh has also reported that during the first half of the year, the economy recorded overall growth of 3.2 percent in real gross domestic product, within which non-sugar GDP grew by 2 percent.
“Given the performance of key sectors within the economy over the first six months of the year, overall growth for 2014 is now projected at 4.5 percent, of which non-sugar GDP is projected to grow by 3.6 percent.”
This means that the growth of the economy has slowed down.
Earlier this year when the Finance Minister presented the Budget he said that Guyana’s economy is projected to grow 5.6 per cent. This was clearly not realized according to the figures now released by the Minister.
According to Dr. Singh, Sugar production in the first crop was 79,995 tonnes, 66.5 percent above the first crop of 2013. The rice industry, he said continues to achieve an unprecedented production boom.
“In spite of instances of lower paddy prices and some delays in payment by millers to farmers, production in the first crop of 312,283 tonnes is already 18.3 percent over last year’s record high first crop of 263,868 tonnes.”
The fishing sector however did not fare well.
According to the Finance Minister, despite the introduction of improved management and monitoring techniques in the fishing industry, first half production was 25.5 percent below 2013 levels.
“Even with an improved performance in the second half, an overall decline in growth is expected and the budget target of 2.2 percent growth has to be revised to a whole year’s contraction of 8 percent relative to 2013 output levels.”
In the mining sector, gold continued to perform miserably.
According to Dr Singh, at half year the sector recorded a decline of 17.2 percent in gold declaration and a 3 percent decline in bauxite’s contribution.
Consequently, the projected end of year gold declaration has been revised downwards to 450,000 ounces, or a 6.5 percent decline, while bauxite value is projected to contract by 6.1 percent.
He said too that excluding gold, total exports grew by 4.3 percent to US$307.5M in the first half of 2014. Sugar exports returned US$34.4 M in earnings, a 26.4 percent increase compared to June 2013, attributed to an 80.3 per cent increase in export volume to 69,687 tonnes.
Rice export earnings increased to US$95.6M, 14.9 percent higher than at June 2013 due to a 30.7 percent increase in export volume to 186,000 tonnes, outweighing the 12.1 percent contraction in export prices to US$514 per tonne.
Timber export earnings rose to US$21.3M, a 31.3 percent increase due to an increase in export volume, reflecting an expansion in plywood exports.
Bauxite export receipts declined marginally by 2.9 percent to US$66.9M due mainly to a 6.4 percent contraction in export volume to 855,877 tonnes. In addition, other exports contracted by 10 percent to US$89.3M primarily on account of a decline in fish and shrimp exports.
However, the first half of 2014 also witnessed a 24.6 percent contraction in gold exports earnings to US$226.7M, associated with a 10.1 percent decline in export volume to 182,411 ounces, coupled with a 16.1 percent contraction in average export prices to US$1,243 per ounce.
As a result, overall receipts from exports fell by 10.3 percent to US$534.2M in the first half of 2014 compared to the corresponding period in 2013.
According to the Finance Minister, internal revenue collections amounted to $30.2B, an increase of 4.5 percent over the corresponding period in 2013.
This, he said, was primarily attributed to a $1.1B increase in collections from the Pay As You Earn (PAYE) personal income tax category associated with the 5 percent salary increase granted in 2013 coupled with an increase in arrears collections.
He said too that corporation taxes from private sector companies recorded an increase of $620.8M or 5 percent.
“Collectively these increases offset decreases in other categories including a $398.1M or 13.4 percent contraction in withholding tax collections associated with lower gold declarations.”
Value Added and Excise Taxes continues to increase this year by 1.8 percent to $30.7B for the first half of the year.
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