Overall real growth is projected at 3.4% in 2015 with the non-sugar economy and the sugar economy projected to grow by 3.8% and 1.7% respectively. The following graph presents contribution to GDP at 2006 prices by various sectors:
Source: Estimates of the Public Sector
The primary industry groups are addressed separately below. In the other sectors, Transportation and Storage Activity recorded the highest average growth of 9.41% over the five years to 2014. Growth in 2015 is expected to decrease to 6.3% from the 13.7% growth seen in 2014. The Construction sector recorded average growth of 6.55% for the five years to 2013 and jumped to 18.0% in 2014, after which a significant decline to 0.3% in 2015 is anticipated. Growth in other areas is expected at 1.2% in 2015.
Agriculture, Fishing and Forestry
Source: Estimates of the Public Sector
The Rice sector recorded the highest growth of 9.90% over the five year period to 2014 and a growth of 10.7% is estimated for 2015. However with the problems surrounding the Petro-Caribe deal with Venezuela, rice is under severe threat and its rapid decline can only be averted if new markets are found. The fishing industry had very different results from that recorded by the rice industry. Over the five year period to 2014, the fishing sector experienced a decline of 3.41% over the years and a further decline is expected in 2015 to 1.9%. Agriculture, fishing and forestry sector recognised a stable increase over the years of 2.75% for the five year period and 5.6% and 4.7% for 2014 and 2015 respectively. The other crops overall growth for the five year period to 2014 was 2.25%, 8.8% growth was achieved for 2014 and 4% is expected for 2015.
Mining and Quarrying
Source: Estimates of the Public Sector
During a five year review to 2014, Gold saw the highest growth of 4.37% when compared to the Bauxite and the Other Mining sectors of 2.36% and 1.95% respectively. Even though it saw an overall increase for the five year period, 2014 saw a decline in Gold of 19.4%, when compared to 2013. Growth is expected in 2015 of 27.8% and Other Mining is also expected to grow in 2015. Other Mining saw five year growth of 1.95% with growth in 2014 of 35.3% reversing earlier declines. Bauxite and Mining and Quarrying saw a five year increase of 2.36% and 3.61% respectively over the five year period to 2014. In 2015, Bauxite is expected to decline by 5.7% while the Mining and Quarrying sector is expecting growth of 0.6%.
Manufacturing
Source: Estimates of the Public Sector
A 3.2% growth is projected for 2015 in Other Manufacturing while a 1.7% growth is expected in Sugar Manufacturing.
Monetary Policy & Inflation
The rate of inflation (Urban Consumer Price Index – Georgetown) for 2015 is projected at 2.5% compared to the revised for 2014 of 1.2%. Food inflation in 2014 was 2.1% with the three years to 2013 registering 1.97%. Prices for Transport and communication decreased in 2014 to a rate of 0.6% compared to an increase of 2.55% to 2013. Medical and Personal Care inflation in 2014 was 4.8%. Footwear and repairs registered a 7% decrease.
Balance of Payments
The Minister projects the overall deficit on the balance of payments to increase to US$113.4 million compared with US$116.4 million in 2014. On the trade side, merchandise exports are projected to decrease by 2.6% to US$1.1 billion, however merchandise imports are expected to fall by 13% to 1.6 billion. With net imports of services at US$178.30 million, and private transfers of US$425.40 million, a net deficit of US$174.65 million is projected on the current account.
The capital account is projected to have a surplus of US$61.22 million in 2015 (US$426.20 million in 2014). In this account, a net inflow of US$90.83 million is expected from medium and long term capital while a net outflow of US$53.75 million is expected on short term capital.
Ram & McRae’s comments
- The Minister of Finance has presented a very bold, ambitious programme which will require great commitment from and coordination with his fellow ministers if its goals are to be achieved.
- Ram and McRae finds the emphasis placed on governance and accountability refreshing and hopes that all the proposals to bolster the institutions needed to support these efforts will be pursued with unrelenting fervor.
- Many plans and ideas have been presented and it is incumbent on the government to ensure that the persons responsible for implementation and execution are identified quickly and given deadlines for presentation of completed action plans. Someone with appropriate authority should be identified as the person responsible for monitoring the implementation of the various programmes and initiatives.
- As we pointed out in 2014, there is a need for additional data on the components of GDP as for example Bauxite is the only sub-sector shown separately under Mining and Quarrying with gold, diamond and others being presented as one. The combination of Footwear with Repairs in the inflation data was also noted as not being useful.
- Proposals to improvement at the Bureau of Statistics are welcome but the planned release of the final report from the 2012 Census in the second quarter of 2016 warrants review.
- While the theme of the Budget involves a Green Economy very few of the projects or targets could be considered green-specific. The President’s earlier announcement of lower duties on new vehicles and higher duties on old vehicles received no mention.
