Though Ukraine war slows global recovery, Guyana expects highest economic growth


By Vishani Ragobeer

A nearly 50 per cent rate of economic growth is still expected in Guyana even though the Ukraine/ Russia war has constrained countries in recovering from the enduring economic fallout of the COVID-19 pandemic.

This is according to the International Monetary Fund (IMF) which in its April 2022 World Economic Outlook, said that the war in Ukraine has costly implications, slowing the global economic rebound from the devastating COVID-19 pandemic.

Because of this, the IMF said that global economic growth is projected to slow from an estimated 6.1 per cent in 2021 to 3.6 per cent in 2022 and 2023. Importantly, this is a downward revision of the economic growth that had been anticipated in January- before Russia’s invasion of Ukraine.

Guyana, like many other countries, has not been unscathed by global events.

The rising cost of food and fuel that emerged due to COVID-19 supply chain challenges and is now exacerbated by the war has bedevilled local consumers, prompting governmental intervention here.

Even so, Guyana’s real gross Domestic Product (GDP) is expected to increase by 47.2 per cent this year – the largest growth rate recorded among the emerging market and developing economies category the country is in.

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.

Across the region, the other oil-producing nations Suriname and Trinidad and Tobago are expected to record 1.8 per cent and 5.5 per cent growth rates respectively.

Beyond 2022, the IMF Guyana is expected to record a 34.5 per cent increase in 2023 and a 3.7 per cent increase by 2027.

And the projected growth rates are similar to recent projections from the World Bank; the Bank noted that 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 at 34.3 per cent, the Bank said.

Overall, the Bank also noted that Guyana’s economy grew by 72.03 per cent since the onset of the pandemic (between 2019 to 2021) – the largest growth rate in the Latin America and Caribbean (LAC) region.

Though not explicitly stated in this IMF report, Guyana’s economic growth is underpinned by the development of a nascent oil and gas sector and spin-off developments. Guyana has been recording large, positive growth following the start of oil production in 2019.

Meanwhile, in the advanced economies category, there are various rates of economic growth. In the United States of America (USA), a 3.7 per cent growth rate is expected this year; an overall 2.8 per cent growth is expected in the Euro area; 2.4 per cent in Japan; 3.7 per cent in the United Kingdom (UK) and 3.9 per cent in Canada.

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