The overall balance of payments for the first half of 2007 reflected a deficit of US$8.6M or $1.7B, from a surplus of US$17M or $3.4B for the corresponding period of 2006, said the Half Year Report from the Finance Ministry.
The report tabled on November 29 revealed that the overall deficit was financed by a debt relief and a drawdown on Bank of Guyana reserves. The Central Bank’s reserves have been impacted this year by the declining US dollar.
On the other hand, the merchandise trade deficit reflected a sharp rise in the value of imports by US$76.7M, even though there was a US$52.2M increase in export earnings at the end of June 2007. The value of merchandise imports grew by 18.1% to US$500.2M and this was said to be a reflection of the increased activities associated with Cricket World Cup 2007.
Three sub-sectors of imports that increased were consumption goods by 36.3% to US$122.8M, intermediate goods by 7% to US$250.1M and capital goods by 24.8% to US$117.5M.
Export earnings
Total export receipts, the report said, amounted to US$317.3M or 19.7% more than the US$265.1M recorded over the corresponding period. This outturn mainly reflected higher volumes exported, since prices for some of the key export commodities declined.
Sugar export earnings were US$56.1M or 10.7% above the June 2006 value owing to a higher volume exported to both regional and extra-regional markets. Meanwhile, rice export earnings amounted to US$38.6M, 77.9% above the level in 2006. The increase in export volume was due to the expanded extra-regional market for the commodity.
Similarly, earnings from bauxite exports were US$43.2M, 32.1% above the value for the end of June 2006. This was due to both volume and price increases where the average unit price experienced a 13.6% increase to reach US$48.3 per tonne, according to the half year report.
Receipts from gold exports were US$68.8M, 37.3% higher than the end of June 2006 level, resulting from an increase in export volume and price. Export volume rose to 106,276 ounces from 91,078 ounces as favourable world prices continued. The average export price per ounce of gold rose to US$648 at the end of June 2007 from US$550 for the corresponding end of June 2006.
And the value of timber exports was US$36M, 33.3% above the value for the corresponding period in 2006, driven by growth in exports of both plywood and other timber products.
The report explained that other exports (non-traditional exports including re-exports) totalled US$74.5M and declined by 10.2% when compared to the same period last year. This decline reflected output decreases in the diamond, fish and shrimp and garments and clothing sub-sectors.
The net payment for services amounted to US$56.9M from US$43.8M over the corresponding period in 2006.