Greater economic growth projected for Guyana in 2021 – World Bank
By Vishani Ragobeer
The World Bank has revised its earlier projection of economic growth for Guyana, now projecting that the local economy will grow by 20.9 per cent in 2021, the highest growth rate in the Latin America and Caribbean (LAC) region this year.
This revision was reported in the World Bank’s June 2021 report on ‘Global Economic Prospects’, released recently. It is, however unlikely that these local figures include the impact of the ongoing, nationwide flooding.
In the January 2021 edition of the Global Economic Prospects, the World Bank had projected that Guyana’s real gross Domestic Product (GDP) would increase by 7.8 per cent in 2021. The new figure in the June report is a 13. 1 per cent upward revision of the earlier projection.
For context, real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy (in this case, Guyana’s economy) in a given year. In simpler terms, the real GDP measures a country’s total economic output, adjusted for price changes.
Generally, the World Bank noted that the global economy is expected to expand by 5.6 per cent this year, which is the fastest post-recession pace in 80 years. For context, there was a global recession (or, temporary economic decline) caused by the COVID-19 pandemic.
Still, despite this recovery, the World Bank noted that this global output is still about two per cent less than the pre-pandemic projections. The LAC region is now expected to grow by 5.2 per cent in 2021 and some 3.9 per cent in 2022.
Guyana’s positive growth is primarily hinged upon developments in its burgeoning oil and gas sector. The economic growth, however, has been constrained by the enduring impact of the COVID-19 pandemic.
In fact, prior to the pandemic, Guyana expected economic growth of 86 per cent in 2020. After the pandemic was declared and the first set of cases were recorded in Guyana, that growth rate was later revised to 52.8 per cent. However, in January, the World Bank estimated that Guyana’s economy grew by 43. 5 per cent in 2020.
Now, with the new projections, the World Bank also projected that economic growth of about 26 per cent in 2022, while growth of 23 per cent is expected in 2023. Importantly, the World Bank lists Guyana as a commodity exporter and a country part of the ‘emerging market and developing economies’ grouping.
Generally, the emerging market and developing economies, collectively, are expected to expand by six per cent in 2021. But, the World Bank highlighted that recovery in many countries has been stymied by a resurgence of COVID-19 cases, lagging vaccination progress and in some cases, the withdrawal of policy support.
The World Bank also noted that rising food prices and accelerating aggregate inflation may also compound challenges associated with food insecurity in low-income countries.