Guyana’s economy projected to grow by 34.3% this year

The content originally appeared on: INews Guyana
Aerial view of the Demerara river in Georgetown, Guyana, on March 1, 2020. (Photo by Luis ACOSTA / AFP) (Photo by LUIS ACOSTA/AFP via Getty Images)

Guyana’s economy is projected to continue its growing trend for yet another consecutive year with projections putting Real Gross Domestic Product (GDP) at a 34.3 per cent growth for 2024.

This was revealed by Senior Minister with Responsibility for Finance Dr Ashni Singh during his presentation of the whopping $1.146 trillion 2024 Budget in the National Assembly on Monday.

The People’s Progressive Party/Civic (PPP/C) Government’s fiscal plan – its fifth since taking office in August 2020 – is themed: “Staying the Course; Building Prosperity for All”.

Initial projections had pegged the country’s real GDP to grow by 25.1 per cent in 2023, with non-oil GDP expanding by 7.9 per cent.

However, Dr Singh reported to the nation that Guyana’s real GDP surpassed expectations and expanded by 33 per cent overall last year with a “stronger-than-expected” growth of 11.7 per cent in non-oil real GDP.

“The expansion of the overall real economy in 2023 can be largely attributed to continued growth in oil and gas activity, with the notable achievement of first oil at the new floating, production, storage, and offloading (FPSO) vessel, Prosperity, in November. Additionally, while growth in the non-oil economy was mainly driven by expansions in the construction and services sectors, notable increases were also observed in all subsectors within agriculture, forestry, and fishing and manufacturing, as well as in the other mining and quarrying subsector,” the Finance Minister explained.

This, he noted, is evident of Government’s policies focusing on supporting growth in the traditional pillars of the economy while managing the oil and gas sector effectively.

Projections: consecutive growth

Heading into the new fiscal year, the Finance Minister said “…the Guyanese economy is set to expand at an even faster pace in 2024, with real GDP growth projected at 34.3 per cent. Once realised, this will represent the fifth consecutive year in which the Guyanese economy will be growing at more than 20 per cent, and will result in Guyana growing at an annual average of 38.8 per cent over that five-year period.”

According to Dr Singh, the projected expansion this year is primarily attributed to the further increases in oil production as the Prosperity FPSO – the third vessel in the Stabroek Block offshore Guyana – ramps up its operations.

Key to note, however, is the continued growth the non-oil economy, which is projected at 11.9 per cent this year, representing four years of consecutive growth – an average rate of 9.9 per cent annually since its 7.3 per cent contraction in 2020.

This year, the agriculture, forestry and fishing sector is projected to grow by 10.4 per cent, supported by increased production across all subsectors.

Meanwhile, sugar will continue to accelerate its recovery with strong growth of 66.1 per cent in 2024 aided by GuySuCo’s continued focus on mechanisation and conversion efforts, as well as promoting value-added production. The sector is expected to produce 100,000 metric tonnes of sugar in 2024, which will be supported by a $6 billion budget allocation.

Running along the same line, the rice industry is expected to grow by 6.2 per cent this year, with production increasing to 710,000 metric tonnes. The $1.3 billion allocation is anticipated to drive an expansion in acreage cultivated, the deployment of new and more productive varieties, and improve research and development.

A 11.6 per cent growth in the other crops subsector is projected this year, largely reflecting considerable progress in corn and soya production as Guyana works to achieve self-sufficiency in 2025. This also indicates expected increases in the cultivation of coconuts, root crops, and spices, as Government continues to put systems in place to achieve food security locally and regionally. The livestock and fishing subsectors are expected to expand by 6.6 per cent and 15 per cent, respectively.

The forestry sector is also projected to record growth of 3.9 per cent, supported by continued investments in the housing sector, and more broadly, construction.

In the extractive industries, further growth in oil and gas and other mining and quarrying, as well as an expected recovery in the gold and bauxite mining subsectors have been projected.

With three FPSOs in the Stabroek Block, production of crude oil is slated to reach over 550,000 bpd in 2024, with a further ramping up to over 600,000 in the latter part of the year – representing a 44.7 per cent growth this year.

The sand, stone, diamonds and manganese subsectors are also anticipated to continue its momentum in 2024, with projected growth of 19.3 per cent.

On the other hand, the gold and bauxite mining industries are projected to reverse last year’s contractions to grow this year by 15.7 and 57.2 per cent, respectively.

The gold mining recovery is expected to be supported by higher projected declarations from the lone large operator, as well as the small and medium scale miners, to collectively amount to 500,000 ounces. While, the turnaround in bauxite mining is to be driven by higher expected production from both operators, given the investments made in the sector, with projected production of over 1,700,000 tonnes this year.

In the manufacturing sector, the growth trajectory will continue this year, at 16 per cent, with increases across all three subsectors including sugar and rice. Other manufacturing is forecasted to achieve growth of 10.4 per cent, again, due to the manufacturing of fabricated metal products and non-metallic products with continued construction and oil and gas activities.

Construction, in 2024, will be maintained with a projected growth of 23.4 per cent, while the services industry will expand by 6.9 per cent this year with supported spillovers from the other sectors – agriculture, construction, housing, and extractives – with the renewed interest in Guyana as a burgeoning investment and tourist destination.