World Bank bumps Guyana up to high-income status

– due to economic growth, increase in Gross National Income

Guyana’s upward climb on global indices continues, with the World Bank most recently revealing that Guyana has moved from the upper-middle to high-income category for fiscal year 2024, on the back of strong economic performances buoyed by higher oil prices.
According to the World Bank in its country classification by income level for July 1, 2023, to June 30, 2024, Guyana and South Pacific Island American Samoa are moving from upper-middle to the high-income category this year.
It was explained that there are two ways a country’s classification can change. The first and most obvious way is a change in economic growth, inflation, exchange rates, and population growth. The second way is a change in classification thresholds.
The World Bank explained that in Guyana’s case, the country’s economic growth is driving the change in classification and the increase in Guyana’s Gross National Income (GNI) – the per capita dollar value of a country’s final income in a year divided by its population.
“The large increase in Guyana’s Atlas GNI per capita is driven by the increasing volume of oil and gas production which more than doubled in 2022. The nominal increase was further amplified by higher oil and gas prices.”
“And despite strong increases in outflows of primary income abroad, Guyana’s nominal GNI jumped 86.2 per cent leading to a 60.0 per cent increase in Atlas GNI per capita,” the World Bank further said.
With a projected growth rate of 37.2 per cent for 2023, Guyana is expected to continue its trend this year, outpacing every other Latin American and Caribbean (LAC) country when it comes to economic growth.
This was according to the International Monetary Fund’s (IMF) latest World Economic Outlook, which it released in April. Of the other LAC countries, St Vincent and the Grenadines (SVG) at 6.0 per cent, has the next highest growth projections for this year.
But while SVG’s growth projections are expected to fall next year to 5.0 per cent, Guyana’s is expected to increase to 45.3 per cent in 2024. The report states, however, that by 2028 Guyana’s economic growth will drop to 3.3 per cent.
Meanwhile, other LAC countries that will record single-digit economic growth this year include Panama at 5.0 per cent, neighbouring Venezuela at 5.0 per cent, Dominica at 4.9 per cent, St Kitts and Nevis at 4.5 per cent and the Dominican Republic at 4.2 per cent.
Last week, President Dr Irfaan Ali had announced that Guyana’s nominal Gross Domestic Product (GDP) almost tripled in the space of two years, moving from $1.1 trillion in 2020 to $3.1 trillion at the end of 2022.
While he had attributed this largely to the country’s petroleum industry, it is also linked to his Administration’s prudent fiscal management.
Noting that Guyana has cemented its place as the fastest-growing economy in the world, the Head of State had further boasted that the country was projected to grow at an average of 25 per cent annually from 2023 to 2026. He indicated that these numbers were impressive when the global economic growth estimates are examined.
“The world is estimated to grow at 2.8 per cent in 2023. Advanced economies are expected to grow at 1.3 per cent; Latin America and the Caribbean, 1.6 per cent; the Caribbean tourism-dependent countries at 3.2 per cent; Caribbean commodity exports, 18.7; and Guyana is expected to grow at 25.1 per cent. Guyana’s non-oil growth is now projected at 7.9 per cent this year, building on the 11.5 per cent growth recorded last year,” the President had said.
Moreover, the Guyanese leader disclosed that the country’s debt-to-GDP ratio stood at 24.6 per cent at the end of 2022, down from 38.9 per cent a year prior. “…demonstrating Government’s commitment to prudent fiscal management of the country’s resources,” Ali expressed.
In terms of inflation, he had revealed that the world estimate is 6.1 per cent; Latin America and the Caribbean, 11.8 per cent, and Guyana is estimated at 3.8 per cent. Inflation has been a problem even in Guyana, but it is not a problem the People’s Progressive Party/Civic (PPP/C) Government has met sitting down.
Back in May 2022, President Dr Irfaan Ali had announced a series of ground-breaking measures to tackle rising cost of living. These measures had ranged from cash grants to households in hinterland and riverine communities to the provision of free fertiliser for farmers, which are aimed at improving the lives of citizens. (G-3)