Though the COVID-19 pandemic has battered many economies, the World Bank reported that Guyana’s economy grew by 72.03 per cent between 2019 to 2021- the largest growth rate in the Latin America and Caribbean (LAC) region.
This is reflected in the World Bank’s semiannual report for Latin America and the Caribbean which was published this month.
Many countries in the region, particularly the tourism-dependent nations, recorded economic declines. Guyana was, however, among the 12 countries that recorded positive economic growth over the past two years.
Importantly, Guyana’s cumulative economic growth (that is, the total economic growth from 2019 to 2021) was the only double-digit growth rate. Nicaragua, the country with the second-highest cumulative growth rate, grew at about 7.53 per cent.
Guatemala, Chile, the Dominican Republic, Paraguay, Costa Rica, Colombia, El Salvador, Honduras, Peru and Brazil were the other countries with positive growth rates.
Though not explicitly stated in this report, Guyana’s economic growth is underpinned by the development of a nascent oil and gas sector, and spin-off developments.
Even though the country’s non-oil economy has been affected by the COVID-19 pandemic and climate-related challenges (flooding), the development of the oil economy, the World Bank noted in a previous report, facilitated Guyana’s economic expansion.
Based on new growth projections, Guyana’s real GDP is expected to expand by 47.9 per cent this year. The trend of economic growth is expected to continue in 2023 with a 34.3 per cent, and in 2024 with a 3.8 per cent growth rate.
In its Global Economic Prospects report, released in January, the World Bank stated that Guyana’s growth projection for 2022 was 49.7 per cent.
Though the new 47.9 per cent projection is a marginal, downward revision, it is still greater than the 26 per cent growth rate that had been projected in a June 2021 report.
The cut-off date for the data that informed the new projections, the Bank said, was March 2022. The country with the second-highest growth projection for 2022 is Barbados, with an 11.2 per cent expected growth rate.
Notably, in this semiannual report, the World Bank briefly mentioned Guyana’s vulnerability to flooding. Like other countries in the LAC region, the Bank pointed out that climate change poses significant challenges to the local economy.
“Coastal cities are also threatened by sea level rise; 60 of the 77 most densely populated cities in the region are located on the coast,” the World Bank said.
It also highlighted that without climate adaptation measures, agricultural production in the region may be hard-hit. And altogether, the Bank warned that climate change could drive million of people in the LAC region back into extreme poverty.
