LNP – Agri, industrial sectors grow in 1H of 2021

The agriculture sector saw a relatively healthy output level in the first half of 2021 compared to the year-ago level. The official GDP data show the sector rebounding by 6.1% (Q/Q) in 1Q after experiencing a contraction of 6.1% last year.

Key commercial crops, especially tea (47.6%), vegetables (19.7%) and fruits (11.7%) made a noteworthy contribution to the growth in overall sector output. However, marine fishing and aquaculture recorded yet another disappointing quarter by contracting 16% (Q/Q) in 1Q.

Though key commercial crops had a robust first quarter, we expect 2Q sector performance to be more-or-less mixed as the country went into an island-wide lockdown in the face of a rising third wave of Corona infections impeding the entire agricultural value chain. In addition, we believe fisheries subsector output may have plummeted sharply as it was badly affected by the X-Press Pearly disaster.

Meanwhile, the Industrial sector grew by 5.5% in 1Q 2021, recovering from a 7.9% contraction in 1Q 2020. Most subsectors expanded but the recovery was uneven, with a contribution to the output growth mainly coming from the manufacturing of food & beverages (28% of the change in output), textile & apparel (22.7%), and construction sectors (13.7%).