Production indicators signal economic decline – Ali

first_imgAs public outcry continues as a result of the stagnant state of Guyana’s economy, former Minister and Economist, Irfaan Ali, believes if nothing is done to halt the economic decline, then the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government’s promise of a good life will be as elusive as the promise to ‘feed, clothes and house the nation’.According to Ali, the latest statistical bulletin published by the Bank of Guyana on the first quarter of 2016 is characterised by “sluggish activities in wholesale and retail trade, financial and insurance and other services industries” and declining performance in sectoral output when compared with the corresponding period last year.He noted that except for the mining sector – which registered commendable growth in the production of gold, diamond and bauxite – all key production indicators suggest the economy is in a deep coma.Ali pointed out that the figures from quarterly report confirmed that after one year under the coalition regime, almost every key production indicator is signalling that the economy is on the decline. This, he reasoned, does not reflect a growth forecast for rest of the year.“Based on the downward trends observed in all the key production indicators, it also means that growth will be based largely on the expanded output of the large scale mines. While on paper the growth in gold output may appear appealing, the sad reality is that the impact will be less pronounced than when the small and medium-scale miners were responsible for the unprecedented performance of the sector,” he stated.The former Minister went on to say that unlike the large-scale miners, the small and medium-scale miners supported the small shop keepers, local operators in the transport sector, and suppliers of mining equipment and invest their earnings in Guyana. These miners also provide employment opportunities to thousands, he added.Former Minister and Economist, Irfaan AliNevertheless, Ali said that during the first quarter of 2016, the production of gold, diamond and bauxite increased by 124.8 per cent, 37.5 per cent and 13.9 per cent respectively. He noted that the increased output reported for the first quarter was due primarily to the output from the Guyana Goldfields and Troy Resources Inc; two large-scale mining companies that were established under the People’s Progressive Party/Civic (PPP/C) Government.Moreover, he posited that the notable contraction in sand output and stone output was not surprising, and if there were any doubts that the construction sector was slowing, then the marked reduction in these two key inputs is adequate evidence that the sector is slowly grinding to a halt. Sand output registered for the first quarter of 2016 was not only 68 per cent lower than the corresponding period last year, but the below the levels registered in corresponding periods of any year between 2011 and 2012.The former Minister outlined that this particular development is of grave concern for the reason, among others, that sustained decline in the construction sector will compound the unemployment problem and misery contractors and suppliers of building materials have been faced with, since the change in Government last year.Moreover, Ali highlighted that the agriculture sector too reported significant reduction in output for all major commodities during the first four months of the year. He stressed that the output of sugar during this period was 4.7 per cent or 1915 tonnes lower than the 2015 level.On the other hand, he said that rice production, which increased continuously between the period 2011 and 2015, has declined sharply in the first quarter of 2016 with the output during the first three months being 56,593 tonnes. This was 37.3 per cent or 33,706 tonnes lower than the level recorded for the corresponding period last year.“There is no need for any academic explanation of the impact of the decline. Rice farmers are losing income and defaulting on their loans,” Ali remarked.As it relates to poultry, the former Minister noted that there was a 7450 tonnes output recorded, which represents 6.6 per cent or 4450 tonnes lower than the period last year.He went on to say that the manufacturing sector registered a decline in the production of several commodities, including rum, beer and stout, soft drinks, malta, ice cream, biscuits, flour, tablets, ointment, stock feeds, and paint.More specifically, the production of rum and soft drinks during the first quarter of 2016 was lower than the output level for the corresponding quarter of any year since 2011. The production of rum and soft drinks during the first quarter of this year was 47.3 per cent and 54.4 per cent lower than the corresponding period last year.Meanwhile, pharmaceutical products, particularly tablets and ointments production for the first two months of 2016 was also below the 2015 level.Other manufacturing commodities such as the production of flour were lower than the level reported in the first quarter of any year since 2011. Flour production slipped by 5.9 per cent; while paint production for the first two months also fell behind the level reported during 2015. This reflected the notable decline in construction activities.last_img

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