Guyana’s economic growth to nearly double in 2022
… As World Bank makes significant change to growth projections
Guyana’s economic growth is expected to undergo a rapid increase in 2022 as the World Bank has revised the country’s growth projection by some 49.7 per cent.
Importantly, the Bank’s new projection is a significant change to an earlier forecast. In its June 2021 report, the World Bank projected that Guyana’s economic growth would be about 26 per cent in 2022.
This new projection was stated in the Bank’s “Global Economic Prospects” report that was released on Tuesday. The figures listed are based on expected growth in real GDP.
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.
As has been the norm for the past few years, Guyana’s economic growth projection is the largest in the Latin America and Caribbean (LAC) region. The country with the next highest projection is St. Lucia, pegged at a 9.6 per cent growth rate in 2022.
Though the World Bank did not disaggregate Guyana’s growth projection in its report, it noted that the country is experiencing a “growth boom” due to rapid development in the offshore oil and gas industry.
Guyana discovered oil in 2015 and by December 2019, the country already started oil production. Already, there have been 27 profitable discoveries in the Stabroek Block offshore Guyana.
While the announcements of new oil discoveries seem almost routine, this level of success is not normal, President of ExxonMobil Guyana Alistair Routledge said recently.
But the country’s President Dr. Irfaan Ali has been touting a diversified economy that is not solely dependent upon the highly volatile commodity- oil.
Meanwhile, the Bank has also revised Guyana’s growth projection for 2023. Previously, this was pegged at 23 per cent but now, the Bank expects that Guyana’s economy will expand by some 25 per cent.
Beyond the Latin America and Caribbean region, global growth is expected to be reduced from 5.5 per cent in 2021 to 4.1 per cent in 2022 and 3.2 per cent in 2023.
“The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term,” the World Bank report noted too.