1. Based on data available for all four quarters of 2015, the growth of GDP/GVA at basic prices is revised downwards to 3.1% instead of 3.4%, estimated in December 2015. Exclusive of sugar, the growth rate worked out to 3.2%.
2. The main changes noted at industry level compared to estimates made in December 2015 are:
(i) Sugarcane: a sharper decline of -8.8% instead of -8.2%, based on a local sugar production of 366,070 tonnes instead of 370,000 tonnes.
(ii) Other agriculture: a growth of 2.1% instead of 3.0% due to lower production of food crops, fish and livestock.
(iii) Manufacturing: a growth of 0.2% instead of 1.5%, mainly explained by lower performance of textile manufacturing (-2.9% instead of -1.0%) and other manufacturing (-0.8% rather than 1.8%).
(iv) Construction: a decline of -4.7% instead of -4.3%, mainly explained by further delays observed in the implementation of public investment projects.
(v) Accommodation and food service activities: a growth of 9.3%, higher than the 8.6% estimated earlier, based on a revised figure of tourist arrivals of 1,151,723 instead of 1,140,000.
(vi) Public administration and defence; compulsory social securities: a growth of 1.4% instead of 2.3%, due to lower than expected number of new recruits.
3. In light of information gathered on key sectors of the economy, past trends, and measures announced in the 2015/16 budget, GDP/GVA at basic prices is forecasted to grow by around 3.9% in 2016, higher than the 3.1% growth in 2015. Exclusive of sugar, the growth rate would remain at 3.9%.
The main assumptions used are as follows:
(i) Agriculture, forestry and fishing: to recover by 3.2%, after the contraction of -1.0% observed in 2015. Within the sector,
a. “Sugarcane”: a local sugar production of around 380,000 tonnes, resulting in a growth of 3.9% compared to -8.8% in 2015, and
b. “Other agriculture”: to expand by 3.0% compared to 2.1% in 2015.
(ii) Manufacturing: to grow by around 1.7%, higher than the 0.2% in 2015. Within the sector,
a. “Sugar milling” to grow by around 3.6%, after the negative growth of -7.2% in 2015. This expansion is based on a local sugar production of 380,000 tonnes and the refining of 80,000 tonnes of imported raw sugar. In 2015, the local sugar production was 366,070 tonnes and 70,000 tonnes of raw sugar were imported for refining;
b. “Food processing” to expand by a rate of 2.5% after a growth of 3.9% in 2015;
c. “Textile manufacturing” to grow by 0.3%, as opposed to the -2.9% growth observed in 2015; and
d. “Other manufacturing” to rebound by 2.0% following the contraction of -0.8% registered in 2015.
Activities of Export Oriented Enterprises (EOEs) are expected to grow by 0.6% after a contraction of -1.4% in 2015.
(iii) Construction: to rebound by 2.0% after five consecutive years of contraction.
(iv) Wholesale & retail trade; repair of motor vehicles and motorcycles: to grow by 3.1% compared to 3.0% in 2015.
(v) Accommodation and food service activities: to grow by around 6.4% based on a forecast of around 1,230,000 tourist arrivals in 2016 compared to 1,151,723 in 2015.
(vi) Information and communication: to grow by 6.9% in 2016, same as in 2015.
(vii) Financial and insurance activities: to grow by 5.4% in 2016, slightly higher than the 5.2% growth in 2015.
(viii) Professional, scientific and technical activities: to grow by 6.5%, higher than the 5.6% growth in 2015.
(ix) Public administration and defence; compulsory social security: to expand by 3.7% compared to 1.4% in 2015.
Consumption and Saving
4. Final consumption expenditure of households and government is expected to grow by 2.9%, higher than the 2.7% in 2015. Gross Domestic Savings as a percentage of GDP at market prices would be 11.5 compared to 11.4 in 2015.
5. Total investment is expected to recover by 7.3% in 2016 after five consecutive years of contraction. Exclusive of aircraft and marine vessels, the growth would be 4.8% after a decline of -2.5% in 2015.
(i) Private sector investment is expected to grow by 1.2% after a contraction of -7.3% in 2015.
(ii) Public sector investment is expected to rebound by 23.6% compared to 0.9% in 2015.
(iii) Investment rate defined as the ratio of investment to GDP at market prices would attain 18.2% in 2016 compared to 17.7% in 2015. Exclusive of aircraft and marine vessels, investment rate would be to 17.8%, slightly higher than the rate of 17.7% noted in 2015.
(iv) Private sector investment rate would be 12.5% and that of the public sector 5.7% compared to 12.9% and 4.8% respectively in 2015.
(v) The share of private sector investment is expected to decrease to 68.6% from 72.8% in 2015 and that of the public sector to increase to 31.4% from 27.2%. Excluding aircraft and marine vessels, the share of private sector investment would be 70.3% and that of the public sector, 29.7%.