Guyana’s non-oil sector’s economic growth revised upwards by IDB

…growth expected to exceed budget projections

The non-oil economy, in which certain sectors had shown contractions in the first half of the year, is expected to rebound even stronger than previously anticipated in February, when the 2022 Budget was read. This is according to the Inter-American Development Bank (IDB).
In its recent report, “Headwinds Facing Post-Pandemic Recovery in the Caribbean”, the IDB predicted that Guyana’s overall Gross Domestic Product (GDP), would grow by a total of 56 per cent in 2022.
The non-oil sector is expected to rebound stronger than anticipated, with the IDB projecting growth figures of 9.6 per cent for 2022. This is an improvement on the 7.7 per cent that was projected in the 2022 Budget. The report also provides a sectoral breakdown.
“The main drivers of growth in the non-oil economy include agriculture, services, and construction, which are projected to grow by 11.9 per cent, 6.3 per cent, and 19 per cent, respectively, all higher than originally estimated in the budget. All three sectors showed dynamic growth in their mid-year results.”
“In contrast, gold production and the manufacturing sector contracted in the first semester of 2022, leading to a downward revision of growth estimates for the year for those sectors to 7.4 per cent and 7.5 per cent, respectively,” the report added.
Three years after oil production began, Guyana is currently the fastest-growing economy in the world. The projected economic growth of more than 50 per cent for 2022 is by far the highest in the Region.
It was revealed in September by the mid-year report that Guyana’s real 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 agriculture and mining.
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 global leader in economic growth,” the Finance Ministry 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 other crops, forestry and livestock in spite of weaker performances in sugar, rice, and fishing. The sector is now expected to grow by 11.9 per cent.
With respect to the 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.
Last month, Finance Minister, Dr Ashni Singh had outlined Government’s plans to utilise oil revenues to diversify the non-oil economy into a globally competitive one, and to invest in citizens to create a suitably equipped and skilled workforce in line with the current and future demand for new sets of skills.
The Finance Minister had explained that Government planned to ensure that revenues earned from oil currently being extracted would be used to lay the foundation for the future as he listed as areas of attention agriculture, transport infrastructure (for improved access to productive land and to improve access to continuous markets); energy infrastructure (to provide reliable and affordable energy as this would be important especially to facilitate a competitive manufacturing sector); physical infrastructure such as roads, bridges, schools and hospitals; and investing in people to ensure they are adequately equipped with the skills to meet new demands.
Dr Singh also noted that Government intended to fully capitalise on its Low Carbon Development Strategy (LCDS) and would continue to manage Guyana’s tropical rainforest in a sustainable manner in order to be compensated by the world for its forest conservation and clean air contribution. (G3)