BUDGET 2023: Economy grew by 62.3% last year

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The latest estimated economic growth for Guyana during 2022 shows that the economy grew by 62.3 per cent in real terms, Finance Minister Dr. Ashni Singh announced on Monday during the presentation of the 2023 budget in the National Assembly.

Global growth for 2022 is now estimated at 2.9 per cent, down significantly from the 5.9 per cent expansion recorded in 2021 in the initial recovery from the doldrums of the COVID-19 pandemic.

And while there is much talk of an economic recovery underway, Guyana is bracing itself for a global recession in 2023.

In the People’s Progressive Party Civic (PPP/C) mid-term budget under the theme ‘Improving Lives Today, Building Prosperity for Tomorrow’, Dr. Singh also warned of a general decline in the prices of Guyana’s primary exported commodities this year.

“Rice and sugar prices are expected to fall by 0.4 percent and 6.8 percent respectively, to US$435 per metric tonne and US$0.38 per kilogramme,” Dr. Singh said.

The sugar sector is estimated to have declined by 18.9 percent in 2022, with sugar production for the year totaling 47,049 tonnes.

In contrast, an expansion of 8.1 percent is estimated for the rice growing sector in 2022, with total production of 610,595 tonnes. Like sugar, there were some lingering effects of the 2021 floods that affected rice production in 2022.

Metal prices are also expected to fall in 2023 with aluminum prices expected to average US$2,400 per metric tonne or 11.3 percent lower than 2022, and gold prices are expected to decline by 5.6 percent to US$1,700 per troy ounce.

Dr. Singh detailed in his budget presentation that most recent forecasts suggest that the price of crude oil is projected to average US$83.1 per barrel in 2023, a decline of about 17 percent year-on-year, even as prices are expected to remain above its 5-year average of US$60 per barrel.

“The commodity price outlook is, therefore, heavily tilted on the downside for key commodities produced and exported by the Guyanese economy,” Dr. Singh said.

In Budget 2022, it was anticipated that real Gross Domestic Product (GDP) would grow by 47.5 per cent, with the non-oil economy expected to expand by 7.7 per cent.

As the year ensued, the oil and gas sector performed even better than expected.

At 62.3 percent overall real growth, Guyana would be the fastest growing economy in the world in 2022.

“Looking ahead, the global economy is expected to expand at an even slower rate in 2023. With one third of the world economy expected to be in recession this year, the global outlook for the year will be heavily impacted by several factors. These include… continued monetary policy responses to inflation, the lasting effects of the Russian invasion of Ukraine, and enduring supply chain disruptions in the aftermath of COVID-19,” the finance minister added.

The latest forecast for global growth in 2023 is 1.7 percent as advanced economies are predicted to grow by only 0.5 percent, while the emerging market and developing economies are expected to keep pace with 2022 levels with growth of 3.4 percent.

Growth in the Caribbean is anticipated to slow further to 5.6 percent in 2023, after benefitting from some uptick in tourism.

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