GEORGETOWN, Guyana, November 29, 2016 (CMC) – Finance Minister, Winston Jordan, is predicting a 2.6 percent decline in the Guyana economy this year as a result of a decline in prices and lower growth in several sectors of the local economy.
Delivering the GUY$250 billion (One Guyana dollar =US$0.004 cents) budget to Parliament, on Monday, Jordan said the economy contracted from a projected 4.4 per cent to a mid-year two per cent and a further overall decline to 2.6 per cent.
The Finance Minister said that was due to a drop in rice and sugar production and a slow public sector investment program (PSIP) among other factors.
He told legislators that the downsizing of several companies and structural changes in the sugar industry were other factors in the economic decline.
Jordan said that the David Granger government is anticipating yet another poor financial year for the sugar industry and it would be injecting nine billion dollars into the sugar industry and the operations of the Guyana Sugar Corporation (GUYSUCO).
He said as a result of the new injection of funds, the government would have pumped GUY$32 billion into the sector since coming to office in 2015.
Jordan also announced that a special Cabinet subcommittee has been set up to look into the state of the industry and offer specific recommendations by the end of 2016. But he emphasised that there is need for radical reorganizing of the sugar industry to stop the current bleed.
According to Jordan, gold production remains on track to surpass 600,000 ounces by the end of the year. He said that production is expected to reach 644,814 ounces. The 2016 Budget projected 550,000 ounces. And Jordan said the high target achievement was due to “the generous concessions granted by government and rising global gold prices, and the two foreign-owned companies reaching full capacity”.
He said gold is expected to continue its “stellar performance” in 2017 and government will continue to work with stakeholders to ensure adherence to declaration, and tax and environmental obligations.
Meanwhile, the bauxite industry is also expected to improve its performance by the end of the year. Jordan said the authorities are predicting a 9.6 per cent growth.
Overall, mining and quarrying is expected to have the highest growth rate in over a decade. The sector is expected to grow by 35.7 per cent by the end of 2016. Other mining and quarrying minerals are expected to rise by 22 per cent as a result of increased stone and sand production.