Guyana cashing in on surging oil prices, pushes growth of economy

Surging energy prices are adversely impacting most countries in the Latin America and Caribbean region but Guyana is one of the few benefiting from this, and expects a massive expansion of the local economy this year.

The Economic Commission for Latin America and the Caribbean (ECLAC), in a new economic survey published on Tuesday, noted that economic growth in the region is expected to be about 2.7 per cent this year.

This follows a 6.5 per cent growth rate in 2021, and signals the “path of low growth” in the region.

But Guyana seems to be a standout during this era of low growth.

According to ECLAC, it is now projected that Guyana’s Gross Domestic Product (GDP) will expand by a whopping 52 per cent this year.

Because of Guyana’s expected growth, the Caribbean should record a 10.2 per cent rate of growth. Excluding Guyana, the expected growth drops to just about 4.7 per cent.

Gross Domestic Product (GDP) simply refers to the monetary value of all finished goods and services made within a country during a specific period (such as a year).

Much of Guyana’s expected gains this year have been attributed to the nascent oil and gas sector and the surgung cost of energy and food around the globe. ECLAC noted that Guyana will earn much more for selling its oil internationally.

“Net hydrocarbon exporting countries will benefit most in 2022 from an increase in the commodity terms of trade of around 17 per cent,” ECLAC stated.

But as Guyana gets more money, ECLAC noted that the country is not spared by the harmful effect of inflation being experienced around the world. WIth this phenomenon, simply, consumers are paying much more for the same good and services.

Notably, however, Guyana is expected to face the lowest level of inflation. This means that while consumers will grapple with surging costs for items, it is not as bad as the editor’s group, ECLAC mentioned.

The organisation also acknowledged that there will be increased public spending in Guyana, as the government channels the oil wealth into new developmental projects.