Home Letters Work will be rewarded; hard work will be rewarded even more
Guyana’s economy will remain resilient against the effects of COVID-19, maintaining its growth trajectory as the petroleum sector picks up steam.
The World Bank has revised its earlier projection of economic growth for Guyana, now projecting that the local economy will grow by 20.9 per cent in 2021, the highest growth rate in Latin America and the Caribbean (LAC) region this year.
This is the latest assessment of the World Bank on the country’s performance last year, and projections for this year. Guyana grew at an extraordinary rate of 43.5 per cent in 2020, having completed a year of oil production.
However, the positive spillover effects have been dampened by a deep contraction in the non-oil economy, triggered by COVID-19 mitigation measures. Despite the lingering adversities, projections remain positive, with the country set to record economic growth of 20.9 per cent at the end of 2021.
This revision was reported in the World Bank’s June 2021 report on ‘Global Economic Prospects’, released recently. It is, however, unlikely that these local figures include the impact of the ongoing nationwide flooding.
The projections are for a growth of 26.0 per cent in 2022 and 23.0 per cent in construction activities ongoing in Providence, East Bank Demerara. Based on the latest estimates, the Gross Domestic Product (GDP) of Latin America and Caribbean Region will be 2.6 per cent lower at the end of 2021 than it was at the end of 2019.
In the January 2021 edition of the Global Economic Prospects, the World Bank had projected that Guyana’s real Gross Domestic Product (GDP) would increase by 7.8 per cent in 2021. The new figure in the June report is a 13.1 per cent upward revision of the earlier projection.
For context, real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy (in this case, Guyana’s economy) in a given year. In simpler terms, the real GDP measures a country’s total economic output, adjusted for price changes.
The World Bank, in its semi-annual report on the region, said while most of the region should be enjoying strong economic rebound in 2021, Haiti and Suriname are expected to experience negative growth. On the other hand, Guyana’s growth rate will remain in the double digits, as the country’s GDP of about US$6.8 billion is expected to more than double by 2025, reaching over US$14 billion.
Guyana, being a middle-income developing country, is home to fertile agricultural lands and abundant natural resources. Gold, bauxite, sugar, rice, timber and shrimp are among its leading exports.
The World Bank noted that the global economy is expected to expand by 5.6 per cent this year, which is the fastest post-recession pace in 80 years.
For context, there was a global recession (or temporary economic decline) caused by the COVID-19 pandemic. Still, despite this recovery, the World Bank noted that this global output is still about two per cent less than the pre-pandemic projections. The LAC region is now expected to grow by 5.2 per cent in 2021, and some 3.9 per cent in 2022.
Guyana’s positive growth is primarily hinged upon developments in our burgeoning oil and gas sector. The economic growth, however, has been constrained by the enduring impact of the COVID-19 pandemic.
In fact, prior to the pandemic, Guyana expected economic growth of 86 per cent in 2020. After the pandemic was declared and the first set of cases were recorded in Guyana, that growth rate was later revised to 52.8 per cent. However, in January, the World Bank estimated that Guyana’s economy grew by 43.5 per cent in 2020. Importantly, the World Bank lists Guyana as a commodity exporter and a country part of the ‘emerging market and developing economies’ grouping.
Generally, the emerging market and developing economies collectively are expected to expand by six per cent in 2021. But the World Bank highlighted that recovery in many countries has been stymied by a resurgence of COVID-19 cases, lagging vaccination progress, and, in some cases, the withdrawal of policy support.
The World Bank also noted that rising food prices and accelerating aggregate inflation may also compound challenges associated with food insecurity in low-income countries.
Considering our country’s oil revenue and other lucrative sources of income, our President, Dr Irfaan Ali, has said the standard of living and the quality of life must be lifted for all Guyanese.
“Work will be rewarded; hard work will be rewarded even more,” our President indicated.
According to our President, he is confident that the steps which our Government have taken in 2021 would continue to lift our economy, and improve the fortunes of every citizen within our nation.