Home Top Stories IMF projects Guyana’s economic growth rate for 2022 at 57%
…higher than Finance Ministry forecasts
The International Monetary Fund (IMF) has projected that Guyana would achieve a growth rate of over 57 per cent in 2022, a slight increase from what the country’s Finance Ministry had projected at the half-year mark.
According to the IMF in its statement on the conclusion of its Article IV consultation with Guyana, which was released on Tuesday, Guyana is expected to experience a Gross Domestic Product (GDP) growth rate of 57.8 per cent this year.
Additionally, the IMF noted that oil GDP would grow by over 100 per cent in 2022, and by 30 per cent on average annually between 2023 and 2026. The strength of this growth is testament to the fact that Guyana’s commercially recoverable petroleum reserves are expected to reach over 11 billion barrels. This, according to the IMF, is one of the highest levels per capita in the world.
“This could help Guyana build up substantial fiscal and external buffers to absorb shocks, while addressing infrastructure gaps and human development needs,” the IMF executives said in their statement.
“Main downside risks to the outlook include volatility in global oil prices; a slowing global economy; or rapid increases in investment, which could lead to macroeconomic imbalances; while upside risks include higher global oil prices and additional gas and oil discoveries.”
In the Mid-Year Report released by the Finance Ministry this year, Guyana’s real GDP had been shown to grow by 36.4 per cent for the first half of 2022, and had been projected to grow by 56 per cent overall for 2022.
Guyana reaching over 11 billion barrels of recoverable petroleum reserves is due to the start-up of the Liza Phase 2 development, with the Liza Unity floating, production, storage and offloading (FPSO) vessel already producing oil. Payara, the third development in the Stabroek block, is expected to start up next year. ExxonMobil has said it anticipates that at least six projects offshore Guyana would be online by 2027.
So far, Exxon’s total investment in Guyana is Gy$1.3 trillion on its own, and over Gy$3 trillion with its partners. Additionally, the joint-venturers’ exploration and production plans up to 2025 would likely increase their investments to more than Gy$6 trillion.
Non-oil GDP growth
Meanwhile, non-oil GDP growth was recorded at 9.6 per cent at the half-way mark. The report further elaborated 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 sectors, 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.
“The petroleum sector expanded by an estimated 73.5 per cent, with 34.6 million barrels of oil produced in the first half of the year. This was the result of the commencement of oil production at the Liza Unity FPSO in February.
“Also on the upside, the bauxite industry is estimated to have grown by 31.9 per cent, and the other mining and quarrying (sand, stone, diamonds, manganese) industries by 36.3 per cent in the first half of 2022,” the Ministry said.
According to the report, the manufacturing sector is estimated to have contracted by 11.4 per cent in the first half of the year. The manufacturing sector is now projected to grow by 7.5 per cent for 2022.
The service industries are meanwhile estimated to have expanded by 7.6 per cent, driven largely by increases in wholesale and retail trade, and transport and storage. The overall 2022 growth rate for the services sector is now forecasted to be 6.3 per cent.
“The construction sector is estimated to have grown by a strong 20.4 per cent in the first half of 2022, reflecting intensified activity in both the public and private sectors,” the Ministry had also explained.