Gross Domestic Product 2019 Highlights
The Gross Domestic Product (GDP) estimation for 2019 has been undertaken by the Vanuatu Statistics Office (VNSO) and the results warrant this preliminary release. The compilation of national accounts statistics is a dynamic process, and therefore needs to adapt to reflect a variety of measures and indicators consistent with the development and structural changes in the economy over a period of time. It is therefore expected that revisions and updates are made to previous period as new source data are brought into the model and validated. This release however concentrates on GDP by production as the official estimates but continues to compute and monitor GDP from expenditure side to which it provides systematic checks in consolidating the two approaches.
This preliminary release comprises GDP derived from production and expenditure estimates in both current and constant (or real 2006 prices). Vanuatu National Statistics Office acknowledges the invaluable contribution from the data providers who have allocated time and resources to provide statistical information and VNSO staff for their dedication despite the challenges faced during this undertaking. Nonetheless, it is to be noted that the timeliness of the GDP estimates has always been hampered by factors associated with the inflow of information from data sources.
|The preliminary estimates for 2019 GDP, Vanuatu’s economy continued to expand showing positive growth for more than ten consecutive years. The economy grew by 3.2 per cent in 2019 reflecting a strong performance over the previous year. When compared to 2018, value added increase by 0.3 percentage point. Chart 1 shows year-on-year growth rates measured by percentage change in constant 2006 prices. The positive|
performance in 2019 was attributed to the good performance in services and agriculture while industry went down following the slow performance in 2018.
The GDP growth of 3.2 per cent in 2019 was mainly driven by services, followed by agriculture, forestry and fishing, while industry decline following a fall in construction. Despite the decline in industry the overall performance in services and agriculture off set the falls with the note that long term growth in this sector is likely to weaken if there is further delay in actual implementation of major infrastructure projects as a result of the COVID -19 global pandemic.
Agriculture, Fishing and Forestry has continued to grow following the level of output shown in 2018 by registering a strong growth of 6.2 per cent. The sub-components of agriculture that contribute to this positive growth, were crop production, which grew by 7.0 per cent, followed by animal production at 5.7 per cent, fishing at 4.1 per cent and forestry at 0.5 per cent. Crop production forms a dominant 80 per cent share of the total output in agriculture; therefore, a moderate performance has driven the industry forward contributing to strong positive growth in overall agriculture sector. Copra production continue to performed positively following an increase in average price by 15.6 per cent from VT 32,000 per ton in 2018 to VT 37,000 per ton in 2019. Cocoa price was more stable than in previous years; however, production has been restricted over long period of time due to low yield from plantation where trees were old and unproductive. The level of production slightly went up in 2019 compared to the previous year.
Industry recorded a decline in 2019 after the strong growth shown in the four past consecutive years. The main driver construction contributes to the decline following the post-Tropical Cyclone Pam reconstruction and other major infrastructure projects that were completed in 2018. Despite the winding down of few of this major donor-funded infrastructure projects in the second half of 2018 there were variation in other major projects which resulted from the delay in actual implementation which roll over through 2019. In 2019 construction recorded a decrease of 22 per cent with a total value added at constant, 2006 prices of VT 3,236 million. Electricity and water continue to grow following a slow performance in 2018 by registering a strong positive growth of 15.4 per cent in 2019. This increase is reflected in the level of consumption for electricity and the demand from new consumers which result from the increasing investment on the infrastructure in Efate, Malekula and Tanna. Manufacturing continues to expand following positive growth in previous years by registering a growth of 5 per cent in 2019; it is a fragile industry mostly driven by agricultural products which are export oriented.
The service sector continued to expand following the level of performance shown in the three previous years by registering a strong growth of 6.1 per cent with a total value added at constant, 2006 prices of VT 45,872 million compared to VT 43,242 million in 2018. The main drivers that contributed positively to overall services were wholesale, retail trade and repair of motor vehicles at 10 per cent followed by finance and insurance and information and communication at 9.6 per cent each, real estate at 7.4 per cent, accommodation and food services at 7.3 per cent. The two major contributor in terms of share in this sector where retail trade and public administration both grew by 6.2 and 3.3 per cent respectively. Transport and education, health, recreation and other services registered a growth of 3.2 per cent each and other wholesale trade also grew by 2.8 per cent. (See Table 1 & 5).
Gross domestic product at current prices was estimated at VT 107,450 million in 2019, registering nominal growth of 6.6 per cent. The GDP Implicit Price Deflator (IPD), which measures the price change of all goods produced in the economy, increased by 3.3 per cent in 2019 compared to 3.2 per cent in 2018. The change in the IPD for 2019 growth was higher than the annual average inflation; looking at the percentage change in the IPD for 2019 it was higher than the annual average inflation in 2018.