— as World Bank increases Guyana’s 2021 growth projection to 20.9 per cent

GUYANA is expected to record the highest growth rate in the Latin America and Caribbean (LAC) region in 2021, with its newly projected 20.9 per cent real Gross Domestic Product (GDP) growth, according to the June edition of the World Bank’s Global Economic Prospects report.

According to the forecasts detailed in this report for the Latin America and Caribbean (LAC) region, Guyana’s growth builds upon the 43.5 per cent growth recorded in 2020. Though adversely impacted by the COVID-19 pandemic, Guyana’s burgeoning oil industry contributed to the massive growth rate. The positive spillover effects were, however, dampened by a deep contraction in the non-oil economy, triggered by measures to contain the COVID-19 pandemic.

In the January edition of this report, Guyana was projected to grow by 7.8 per cent. Now, with the revised projection, the country has topped the growth projection for the LAC region. Importantly, the next highest projection is 10.3 per cent, which is expected in Peru.

Additionally, earlier this year, it was reported recently that the International Monetary Fund (IMF), in its latest World Economic Outlook report for 2021, revised Guyana’s projected real Gross Domestic Product (GDP) growth upward, nudging it from the initially reported 8.1 per cent to 16.4 per cent.

Commenting on that improved outlook, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, said that this improvement can be credited to the government’s fiscal policies and measures outlined in Budgets 2020 and 2021.

Further, in 2022, the World Bank also projects that the local economy will expand by 26 per cent, and then by a further 23 per cent in 2023. Comparatively, in 2021, the general growth rate for countries in the LAC region is 5.2 per cent. In 2022, it is expected that there will be a growth rate of about 3.9 per cent.

Earlier, the World Bank’s semi-annual report on the LAC region, said that while most of the region should be enjoying strong economic rebound in 2021, Haiti and Suriname are expected to experience negative growth. On the other hand, that semi-annual report stated that Guyana’s growth rate will remain in the double digits.

Meanwhile, the newly released global prospectus report also noted that the global economy is expected to record a 5.6 per cent growth rate this year, which is the fastest post-recession pace in 80 years. This global growth, a press release from the World Bank said, however, is largely attributed to “strong rebounds” from a few major economies.

And, it was noted that, in spite of this recovery, global output will still be two per cent lower than the pre-pandemic projections.

In the local context, the World Bank previously acknowledged that oil production is undoubtedly contributing significantly to local growth but cautioned Guyana that risks related to the management of wealth generated from the sector remain.

“Guyana will be challenged to transform its burgeoning oil wealth into human capital, physical capital, and financial assets for broad-based welfare increases,” the World Bank advised.

On Wednesday, oil giant ExxonMobil announced that it had made its 20th oil discovery at the Longtail-3 site, in the Stabroek block, offshore Guyana.

While welcoming that oil find, Minister of Natural Resources with responsibility for the Petroleum Sector, Vickram Bharrat, recommitted the government’s efforts to ensuring the sustainable exploration and development of Guyana’s Oil and Gas Resources.

“This will be done in keeping with the highest level of compliance and transparency to ensure that the benefits from this sector enhance the lives of all Guyanese,” Bharrat reassured members of the public.