The economy has been targeted to achieve growth of 3.8 per cent this year, and it is expected that the mining, quarrying and services sectors will drive this growth.
Achieving this growth would put the country on par with projections made by the International Monetary Fund (IMF) in its January World Economic Outlook – that in 2017 and 2018, economic activities are projected to pick up in emerging markets and developing economies.
However, the one-sided reliance on growth from the resource extractive sector had led to what is known as “Dutch disease”. This is where the rest of the economy stagnates – such as four of the traditional “six sisters” in Guyana – rice, sugar, bauxite and timber; the other two being gold and diamond.According to the Monthly Economic Bulletin (MEB) published by the Economic Policy Analysis Unit (EPAU) of the Finance Ministry, Guyana’s economic growth last year was fuelled by strong performances in the gold, diamond and quarrying industries, and this is a pattern that is expected to continue this year.
“Growth in the mining and quarrying sectors is expected to be driven by continued growth in the gold industry; as production for both Guyana Gold Fields and Troy Resources is expected to rise, along with expected increased declarations from the small and medium sized miners, due to favourable global prices,” the MEB for January 2017 has outlined.
Gold production for January 2017 has been recorded at 44,959 ounces, reflecting a 25.1 per cent increase over the total achieved in January 2016. “This increase continues to be underpinned by strong performance by Guyana Gold Fields Inc. and Troy Resources, along with greater declarations from the small and medium sized miners. This industry is expected to continue to experience positive growth in 2017,” the January MEB outlined.
Small and medium-sized miners, as well as the two expatriate companies, experienced similar increased production consistently throughout last year. This saw gold production in December 2016 totalling 91,540 ounces, compared to 70,834 ounces achieved during the same period in 2015. This resulted in total production for last year reaching 712,706 ounces, thus representing an increase of 58 per cent over the previous year.
The MEB has also stated that growth in the services sector is expected to be underpinned by strong performances in the construction, electricity and water, transportation and financial industries. One the other hand, the MEB has revealed that bauxite production for January 2017 was 125,835 tonnes, compared to 144,524 tonnes in January last year; and this reduction was mainly due to lower demand.
“The Bauxite industry is targeted to grow by almost two per cent in 2017, with growth expected to be underpinned by rising global prices along with stronger demand during the year,” the MEB projected.
Decline in bauxite production was also experienced in December 2016, when a reduction of 37,638 tonnes was recorded in comparison to the same period in 2015.
Production for 2016 amounted to 1,479,090 tonnes, compared to 1,526,467 tonnes produced the previous year, a reduction of 3.1 per cent. The MEB for December 2016 noted that performance within the bauxite industry was credible in the first quarter of 2016. However, production levels began to fall from the second quarter of the year, and continued into the third and fourth quarters.
“(This was) due to plant failure at one of the companies, an issue which was expected to be resolved promptly but (was) prolonged for a greater period. This industry is expected to experience positive growth in 2017,” the December MEB report has stated.