Guyana’s economy being ‘supercharged’ by oil – Bloomberg

– capital spending, massive infrastructural & housing drives cited

Guyana Government’s intense capital expenditure on infrastructure and housing developments has been cited by the United States (US) based media outlet, Bloomberg, as the “supercharging effect” that Guyana’s oil wealth has had on the country’s economy.
In a recent report, Bloomberg pointed out that Guyana’s economy has grown by approximately 50 per cent in the last year. This is unparalleled growth that has resulted in Guyana becoming known as the world’s fastest-growing economy.
“So, this is a magnificent supercharging effect that oil has had on Guyana’s economy. Capital expenses grew by 107 per cent last year. They’re building a lot of roads and a lot of houses. So especially housing developments and things like that, there’s always been a backlog of people in Guyana who’ve wanted to build houses, but there just hasn’t been the infrastructure.”
“So, someone might want to build a house, but there’s no electricity or sewage service. So now the Government is building new residential areas, paving the way with the infrastructure that’s needed for that. So, there’s a lot of people building houses,” Bloomberg also said.
Three years after oil production began, Guyana is currently the fastest-growing economy in the world, with a growth of over 50 per cent now forecasted for 2022 and medium-term average annual growth projected at 25 per cent.
It was revealed in September by the mid-year report that Guyana’s real Gross Domestic Product (GDP) grew by 36.4 per cent for the first half of 2022, on the back of growth in a number of economic sectors such as the agricultural and mining sectors.
According to the report, in addition to Guyana’s GDP growth, non-oil economic growth was 8.3 per cent. This, according to the Finance Ministry, reflects the Government’s supportive policy. In addition, the outlook for the rest of the year will continue to be favourable.
“For the full year, real GDP growth in 2022 is now projected at 56 per cent overall, and non-oil GDP growth at 9.6 per cent, maintaining Guyana’s position of the global leader in economic growth,” the Ministry of Finance said.
The report noted that the agriculture, forestry and fishing sectors are estimated to have expanded by 10.9 per cent in the first six months of 2022. These figures were driven by higher production from the other crops, forestry and livestock, in spite of weaker performances in the sugar, rice and fishing industries. The sector is now expected to grow by 11.9 per cent.
With respect to mining and quarrying sectors, these are estimated to have grown by 64.6 per cent in the first half of the year, with a revised 2022 forecast of 99.9 per cent driven by growth in the petroleum and other mining industries.
Meanwhile, the construction sector is estimated to have grown by a strong 20.4 per cent in the first half of 2022. And as reflected in the Bloomberg report, this is reflective of intensified activity in both the public and private sectors.
While on a panel discussion at the Housing Forum 2022, hosted by the Inter-American Development Bank (IDB) Group in Washington, DC, in October, Minister within the Housing Ministry Susan Rodrigues revealed that the house lot allocation programme has increased by a whopping 300 per cent since Government took office.
At that time, there was a backlog of over 70,000 applications pending, dating back years. Out of the total applications in the system, 75 per cent are from low-income households. The Government, through the Central Housing and Planning Authority (CH&PA), distributed almost 2000 house lots during the first six months of the year and is projected to distribute a further 8000 house lots by this year-end.
According to the mid-year report, 1843 house lots were distributed in the first half of the year. This means that since the People’s Progressive Party/Civic (PPP/C) entered office in 2020, they have allocated 11,680 house lots.

“We see the transfer of that wealth to our infrastructure system and to our housing investment, where we have seen the housing allocation increase by 300 per cent from the previous years. There is a lot of investment taking place,” Rodrigues pointed out in the panel discussion.
“Our low-income population is our women, people with disabilities, young people, our Indigenous community. When we invest in our housing programme, these vulnerable groups are the main beneficiaries in our housing programme,” she had added.
Turning to the housing sector, she asserted that Guyana has a heavily subsidised programme that is primarily designed to cater for vulnerable groups. A breakdown shows 82 per cent of house lots being subsidised by the Government for low affordability.