Analysis and News

Guyana's Exports rise by US$379.6M in first quarter

BY GEOCAP's Contributor: Navendra Seoraj

Empirical evidence shows that productivity in economic sectors across the world has been severely affected by the COVID-19 pandemic, and while Guyana was not immune to the direct and indirect effects of this malady, the country performed well in the first quarter of 2021, recording positive economic growth and an increase in exports by US$379.6 million.

Necessary restrictions instituted by local authorities to curb the spread of the COVID-19 pandemic had forced stakeholders in key productive sectors to scale back on their operations, but the relaxation of some of those measures, early this year, gave operators the space to increase production and gradually return to pre-pandemic levels.

The true extent of Guyana’s performance and its steps towards recovery from the effects of the pervasive pandemic and a protracted General and Regional Elections in 2020, were highlighted by the Bank of Guyana in its quarterly report which was released recently.

According to the central bank, the local economy continued to benefit from oil output, but the non-oil economy registered mixed output performance in the major sectors during the first quarter of 2021, as the economy is still recovering from the impact of the ongoing pandemic.

Even with output not reaching pre-pandemic levels, the country was able to record a merchandise trade surplus of US$369.2 million in the first quarter, juxtaposed with a deficit of US$1 million last year. This out-turn, according to the central bank, reflected a US$379.6 million growth in exports.

At the end of the first quarter of 2021 total domestic exports reached US$992 million compared to US$622.8 million, which was recorded during the corresponding period last year.

Based on information from the bank, higher export receipts stemmed from US$674.1 million for crude oil and US$20.9 million from bauxite. Conversely, when compared to the corresponding period last year, there were lower receipts from gold, ‘other export,’ rice and timber by US$36.2 million, US$7.3 million, US$4.4 million and US$0.1 million, respectively.

At the end of the first quarter of this year, gold accounted for US$205.6 million of total export receipts, while rice accounted for US$32.2 million; rum, US$12 million; shrimp, US$11.9 million; timber, US$6.4 million; sugar, US$4.6 million and ‘other,’ US$24.3 million.

Although the contributions of some sectors to total export receipts were fairly constant, the general output was higher, especially in the agriculture sector. In this sector, the output of the rice 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.

Rice production soared notwithstanding the adverse weather conditions experienced during the first crop. “The fish and shrimp sub-sector managed to perform favourably despite the many challenges such as piracy and the ongoing COVID-19 pandemic. Sugar output increased in the first quarter and was attributed to rehabilitation works at the functioning estates, critical investments in machinery by GuySuCo and high workers’ morale during the first crop for 2021,” the central bank related in its report.

Importantly too was the notable increase in the output of crude oil and diamonds by 82.8 per cent and 44.8 per cent, respectively.

On the other hand, 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. Output in the forestry sub-sector also declined by 12.3 per cent during the period under review.

The central bank, in its report, related: “The decline in the gold industry was on account of lower declarations by one large scale mining company and the small & medium scale miners by 68.6 per cent and 8.1 per cent, respectively.”

Even with the output in some sectors declining during the first quarter of 2021, the prospects remain positive moving forward, as the central bank believes that export receipts will improve mainly because of oil exports, and higher prices for gold and rice.

Productivity in certain sectors could, however, be impacted by not only the lingering effects of the pandemic, but also those brought on by nationwide flooding caused by persistent rainfall over the past month.

President of Guyana, Dr. Irfaan Ali, acting on the advice of the Civil Defence Commission (CDC), had announced recently that the country is experiencing a Level Two disaster.

In a proclamation issued on June 13, the President declared Guyana to be in a state of disaster because of the persistent flooding. At the time of this announcement, some 28,228 households were affected by flooding, some with water entering their homes, domestic animals and livestock in distress, or flooded farmlands.

The Guyana Chronicle has since reported that the government, as part of their efforts to mitigate the impact of flooding across the country, has deployed equipment to conduct cleaning and clearing of drains and canals, installed new water pumps and drainage tubes, dredged and excavated clogged waterways and repaired breaches and damaged infrastructure.

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