ECLAC ups projected 2023 GDP growth rate for Guyana to 39.2%

The content originally appeared on: INews Guyana
An aerial view of the beautification project which is a brainchild of First Lady, Arya Ali

Following strong performances from Guyana’s oil and non-oil economic sectors, the Economic Commission for Latin America and the Caribbean (ECLAC) has upped its 2023 projected Gross Domestic Product (GDP) growth rates for Guyana to 39.2 per cent.

Just a few months ago, ECLAC had projected that Guyana would have a 25.1 per cent GDP growth rate for 2023. It has now revised that projection, with the UN economic forum now expecting that Guyana will have a 39.2 per cent GDP growth rate for 2023.

According to ECLAC’s 2023 “Preliminary Overview of the Economies of Latin America and the Caribbean” report, Guyana’s GDP growth rate for 2023 will outpace other Latin American and Caribbean countries, whose rates are mostly in single digits.

The trend is expected to continue in 2024, with ECLAC projecting that Guyana will have 28.9 per cent GDP growth rates, as oil production ramps up. This is significant since in 2024, GDP in Latin America and the Caribbean is projected to grow by an average of 1.9 per cent.

“In 2024, GDP in Latin America and the Caribbean is projected to grow by an average of 1.9per cent, maintaining the trend of low growth. All subregions are forecast to grow less than in 2023: projections are 1.4per cent for South America, 2.7per cent for Central America and Mexico, and 2.6per cent for the Caribbean (excluding Guyana).”

“Meanwhile, Guyana is expected to outpace other Caribbean countries for 2023 and 2024, with a 39.2 per cent projection for 2023 and a 28.9 per cent GDP growth rate projection for 2024,” the report further explained.

In September, ECLAC had projected in its 2023 economic survey that Guyana would have 25.1 per cent GDP growth rate. Growth projections for 2023 from other sources had also put Guyana’s GDP growth rate at slightly less than the revised rate.

Guyana’s rapid economic growth since the start-up of oil production in 2019 was highlighted by the International Monetary Fund (IMF), with the Fund revealing in its 2023 Article IV consultation staff report that Guyana’s economy has tripled in that time.

At the time of reporting earlier this month, the IMF had related that the People’s Progressive Party/Civic (PPP/C) Government has already started to invest heavily in Guyana’s overwhelming development needs, with the help of oil revenues that were first transferred to the budget in 2022.

The IMF further related that the Government’s fundamentals have been strong and there were no signs of inflationary pressures or overheating, associated with the government pumping a great deal of oil money into the economy.

Another observation made by the IMF was the Government’s efforts to stave off inflation. The IMF noted that given the medium-term risks of inflation as the economy expands, a continued focus on maintaining macroeconomic stability by sound policies was recommended.

According to the IMF, Guyana’s rapid economic growth owes much to oil production, which started with the Liza Destiny Floating Production, Storage and Offloading (FPSO) vessel in the Stabroek Block. According to the IMF, Guyana has per capita the largest oil reserves in the world and a higher real Gross Domestic Product (GDP) growth than any other country.

“The Guyanese economy has tripled in size since the start of oil extraction (end-2019), from one of the lowest GDP per capita in Latin America and the Caribbean in the early nineties. Oil production is ramping up rapidly, supporting the highest real GDP growth in the world in 2022 (62.3 per cent).”

“Going forward, oil production will continue to expand rapidly as four new fields will come on stream by end-2028. Sustained real non-oil GDP growth is also expected, as the Government continues to invest in human capital, lower energy costs, and build infrastructure, including for climate change adaptation. Real GDP is expected to continue to grow extremely fast in 2023 (38.4 per cent) and on average of 20 per cent per year during 2024-28,” the IMF had said in the report.