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Private sector outperforms public sector

With the main presidential candidates going into today’s elections promising wage increases to the public sector, latest data from the Central Bank shows that the private sector industries outperform public sector industries as the private sector industrial production index recorded positive growth while the index of the public sector declined.

The Public Sector Major Industrial Output Index decreased by 15.4 percent from 100.2 points in October 2008 to 84.8 points in October 2009, according to economic data released by the Central Bank last Friday. The base year for this index is 1997.

The Private Sector Industrial Production Index, with a base year also of 1997, grew by 3.4 percent to 181.9 points in October 2009 from 176 points in October 2008.

For the first ten months of 2009, the Private Sector Industrial Volume Index gained 2.2 percent to 170.6 points from 166.9 points in the corresponding period of 2008.

The food, beverages and tobacco category gained 5.1 percent, the textiles, apparels and leather products category declined 0.9 percent, wood and wood products gained 3.1 percent, paper products gained 3.7 percent while chemical products gained 0.8 percent.

These figures were presented in the latest Monthly Economic Indicators released by the Central Bank for the month of November 2009.

Public sector industrial output was available for the first nine months of 2009.

The Public Sector Industrial Output Index for January to September 2009 declined a marginal 0.38 percent from 82.75 points in 2008 to 82.44 points.

The food, beverages and tobacco category declined by 25.63 percent, paper products sector declined by 1.23 percent while non-metallic mineral products sector declined 41.32 percent. The Wood and wood products sector gained 23.82 percent while chemical products gained 0.17 percent.

With public finance in a precarious position, the Central Bank warns against increasing public sector wages and other ‘reckless’ spending as it could badly effect the growth of credit to the private sector.

According to latest Central Bank data, credit to the government from the domestic banking sector had grown 25.1 percent in November 2009 from November 2008 which had grown 44.3 percent from 2007.

Private sector credit growth had declined by 6.1 percent in November 2009 from November 2008 where a positive growth rate of 8.5 percent was recorded from 2007.

The country’s industrial sector grew by 4.4 percent during the third quarter of 2009, which was an improvement from the 1.9 percent and 3 percent growth rates for the first and second quarters respectively.

Mining and quarrying grew by 5.6 percent during the quarter. The manufacturing subsector grew by 3.2 percent with the country’s leading export, apparels, growing by 1.1 percent. Electricity gas and water grew by 6.7 percent, with the electricity sector growing by 6.6 percent.

The construction sector grew by 6.4 percent led by infrastructure development activities of the government, the statistics department said.

According to the department of Census and Statistics, about 89,000 jobs in the industrial sector were lost during the September 2009 quarter.

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