-with an expanded non-oil economy
Georgetown, Ministry of Finance, January 8, 2023: Guyana’s macroeconomic context continues to be one of a booming economy, with oil production driving growth in exports, Gross Domestic Product (GDP) and government revenues and expenditures in the medium term. The non-oil economy is also projected to have a ‘better-than-expected turnout of 9.6 percent for 2022 compared to 7.7 percent projected in the country’s 2022 budget’. This is according to the Inter-American Development Bank’s (IDB’s) quarterly (December 2022 edition) publication “Caribbean Economics” under the sub-title ‘The Headwinds-Facing the Post-Pandemic Recovery’. This recent edition of the publication examined Caribbean economies and how they have been performing during the post pandemic period while analyzing what was done by their Governments to allow for the economic results in each.
In Guyana’s case. the IDB publication highlighted that ‘in its October, 2022 World Economic Outlook (WEO), the International Monetary Fund (IMF) increased its estimates for oil production and GDP growth as a result of incorporating oil production from two additional floating, production, storage, and offloading (FPSO) vessels’ which resulted in higher levels of production but at the same, considering higher energy prices, led to Guyana’s main export flows and as a consequence Guyana’s volume of exported goods was projected to rise by ‘an annual average of 50 percent over 2022-2026 in contrast to the IMF’s previous estimate of 22.5 percent in its April 2022 WEO (IMF 2022b). However, the publication also noted that GDP growth was ‘expected to significantly expand in 2022 and ‘includes stronger recoveries in some ‘non-oil sectors’. The publication back this up by highlighting that the non-oil economy is also expected to have a better than expected turnout of 9.6 percent for 2022 compared to 7.7 percent projected in the country’s 2022 Budget’. It also indicated that the main drivers of growth in the non-oil economy include agriculture, services, and construction.
Recognizing the importance of a strong, diversified economic base, the President Ali-led Government in the earliest days of oil production, placed the highest level of importance on a strong non-oil economy. This is evident with Guyana’s non-oil growth in 2022 projected at over 9 percent, building on the 4.6 percent recorded in 2021 and over the medium term is forecasted above global levels.
Currently, Guyana holds portfolio responsibility for Agriculture and Food Security in CARICOM. As such, the publication pointed out that in order to strengthen food security, government had promoted the Vision 2025 by 25 policy initiative, which sought to ‘reduce extra CARICOM food imports by 25 percent by 2025. The report noted also that ‘Guyana is among the governments in the region that have been organizing investment forums to promote technological improvements in agriculture and foreign direct investment’. The report pointed out too that Guyana ‘rapidly moved from being a net importer of agricultural products and mineral fuels, representing 8 percent of GDP in 2018 and 2019, to being a net exporter of the same commodities, with a trade surplus of 16 percent of GDP in 2020 and 31 percent in 2021 with the rest of the world’.