Without Guyana, Caribbean facing significantly lower growth rate

The World Bank has projected that Guyana will undergo significant economic growth in 2022 but without Guyana’s economic expansion, the Caribbean faces a substantially weaker level of growth.

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.

And according to the new Global Prospects report from the World Bank, in the Caribbean region alone (excluding Latin America) growth is projected to be 7.3 per cent this year and 5.9 per cent in 2023.

The World Bank, however, pointed out that this region-wide growth rate “reflects a large contribution from Guyana, where offshore oil production recently began.”

“Growth in the Caribbean excluding Guyana, most of which is highly reliant on tourism, is projected to be substantially weaker, at 4.6 per cent in 2022 and 4.2 per cent in 2023,” the report stated.

The growth rates are measured using estimates of countries’ real Gross Domestic Product (GDP) which 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.

Since 2020, many Caribbean economies have been battered by the COVID-19 pandemic. This is so because many Caribbean countries depend heavily on tourism, which was a sector disrupted by travel restrictions geared at slowing the spread of the novel coronavirus.

Guyana has been able to withstand the impact of the pandemic, and even record positive economic growth when many countries faced declines because of its new oil and gas industry.

Importantly, though, the World Bank noted that in most tourism-reliant economies, growth in 2022 is projected to speed up, compared to 2021 rates. This is due to the expected recovery in international arrivals.

The World Bank, however, pointed out that the rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term.