In spite of the burden of external shocks and domestic challenges, Guyana continues to maintain its position as a global leader in economic growth with a massive expansion of the economy in the first half of the year.
Notable expansions were recorded in both the oil and non-oil sectors.
Released by the Ministry of Finance on Saturday, the 2022 Mid-Year Report recorded an overall real Gross Domestic Product (GDP) growth of 36.4 per cent.
With the non-oil economy growing by 8.3 per cent, the overall growth is a reflection of the government’s supportive policy stance.
Guyana has achieved this expansion in the economy even as global growth prospects have been revised downwards, now projected at 3.2 per cent and significantly lower than the estimated 6.1 percent growth recorded in 2021
It follows the Russian invasion of Ukraine and the disruptions the war has added to existing supply disruptions and further exacerbating already high commodity prices and soaring levels of inflation first brought on by the global COVID-19 pandemic.
The events of the last three years have brought into sharp focus the devastating impact that shocks, arising on both domestic and external fronts, could have on economies.
Notwithstanding the continued uncertainty, the outlook for the second half of the year continues to be favourable with the full-year real GDP growth now projected at 56 per cent overall.
According to Finance Minister Dr. Ashni Singh, the growth experienced in the local economy can be directly credited to government policies.
“Led by President Ali and fueled by the rapid economic growth, we have embarked on a period of rapid transformation, and our government has laid out a master plan for the rapid development and transformation of Guyana.
“More importantly, we have demonstrated the capacity and commitment to working assiduously to make this vision a reality so that benefits can redound to citizens in the shortest possible time,” Dr. Singh said in a statement that accompanied the report.
The Minister said the government intends to confront the global uncertainty going forward with measures locally to sustain the growth and reduce the burden on the population.
During the 2022 Budget presentation in January, one of the key measures was the reduction of excise tax on petroleum from 20 per cent to 10 per cent.
In March, the government cut this tax further from 10 per cent to zero. The government also committed to absorbing the impact of rising fuel prices on the cost of services provided by the Guyana Water Inc. and Guyana Power and Light, to ensure it does not translate to higher electricity and water bills for the Guyanese people.
Also announced in the Budget presentation was the extension of the measure to maintain pre-pandemic freight rates in the calculation of import taxes.
The government also removed VAT on cement, and as part of the $5 billion allocated in Budget 2022 for measures to ease the cost of living, utilised $1 billion for the purchase and distribution of fertiliser to farmers across the country, and $800 million to provide one-off cash grants to households in the hinterland and riverain communities.
These and other measures are all aimed at containing cost escalation in the productive sectors and at bringing relief to the people.