Tertiary sector, the largest contributor to economy

Picture: NSB

Last year imports of goods and services rose by 15.74 percent while the export of goods and services increased by 8.92 percent



Out of the three main economic sectors, the tertiary sector reported the largest share of the economy in 2021, accounting for 46.61 percent. The secondary sector came second, accounting for 34.20 percent, while the primary sector accounted for only 19.19 percent.

According to the National Accounts Statistics 2022 report, published by the National Statistics Bureau, the primary, secondary, and the tertiary sectors of the economy have largely remained the same over the past few years. However, starting 2017, the secondary sector’s share of the economy began to decrease.

According to the report, the secondary sector had a reduction in its shares throughout the year as compared to the earlier year of 0.52 percentage points, while the tertiary and primary sectors saw a minor increase in their shares of 0.48 percentage points and 0.04 percentage points, respectively.

The primary sector saw a growth of 2.05 percent last year, which is a decrease of 2.52 percentage points from the increase of 4.57 percent in 2020. Livestock and the forestry sector are blamed for the economic slowdown.

Furthermore, compared to the previous year the growth of the agriculture subsector slowed. According to the report, the sector’s contribution to the GDP growth in 2021 was just 0.24 percentage points.

Even though it is stated that the agriculture (crop) sector remained to be the principal engine of the primary sector’s growth in 2021, the sector saw a growth of 2.43 percent and contributed 1.11 percentage points to the sector’s growth.

The primary sector’s nominal Gross Value Added (GVA) increased from Nu 32,997.45 million (M) in 2020 to Nu 36,036.73 million (M) in 2021, and its proportion of the economy was 19.19 percent.

Like how the economy recovered from an all-time low of -12.84 percent in 2020, the industry sector’s growth increased by 1.96 percent in 2021, up 14.79 percentage points from the year before. Additionally, the sector’s growth contribution to GDP was 0.73 percentage points.

The sub-sectors that contributed most to the sector’s growth were mostly the mining and quarrying and construction sectors. The sector’s overall GVA was calculated to be Nu 64,215.43 million. According to estimates, the secondary sector’s share decreased by 0.52 percentage points from 34.71 percent in 2020 to 34.20 percent in 2021.

According to the report, the tertiary (service) sector achieved a GVA of Nu 87,520.61 M in 2021, accounting for 46.61 percent of GDP. From 46.13 percent in 2020, the sector’s share climbed by 0.48 percentage points.

“After posting one of the lowest growths in the industry in 2020, the sector saw growth of 6.13 percent in 2021 compared to a decline of -10.81 percent the year before, a rise of 16.94 percentage points,” the report stated.

The report further states that 3.11 percentage points of the GDP growth were provided by the sector. It also claims that all tertiary sector sub-sectors saw growth, except for the health and education sub-sectors, and finance and insurance activities.

In addition, the subsectors of transportation and communication and wholesale and retail trade saw some of the highest growth rates at 16.21 percent and 7.26 percent respectively.

In the meantime, the nation’s GDP expanded by 4.09 percent in 2021, up by 14.10 percentage points from a fall of -10.01 percent in 2020.

Mining and quarrying, which contributed 28.27 percent to the economy’s growth, was followed by transport and communication accounting to 16.21 percent), building with 8.78 percent, and wholesale and retail commerce with 7.26 percent.

The water and power supply, finance and insurance, and education and health sectors, on the other hand, had declined by 3.69, 4.16, and 0.01 percent, respectively.

While on the demand side, the report further states that household final consumption expenditure increased by 4.85 percent and Government Final Consumption Expenditure increased by 5.73 percent. Additionally, the Gross Capital Formation increased by 12.60 percent in comparison to a decline of 15.99 percent in 2020.

Additionally, in 2021, the imports of goods and services rose by 15.74 percent while the export of goods and services increased by 8.92 percent.

In 2021, the Gross National Income (GNI) increased by 4.10 percent, an increase of 11.24 percentage points over the -7.13 percent reported in the previous year. According to the research, a decrease in the net outflow of primary income compared to the previous year is what caused the GNI to rise in 2021.

The primary revenue that was sent to the rest of the world in 2021 was Nu 13,022.55 M, up from Nu 12,427.29 M in the year prior. The net primary income was recorded as Nu -11,507,87 M, a rise of Nu 922,41 M over the pervious year.