Guyana on track for 47.2 percent GDP growth this year- IMF Report

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WhatsApp Image 2022-04-20 at 3.39.30 PM-46580574
An overhead view of the capital city, Georgetown

Guyana’s economy remains resilient in the face of global economic tensions and is on track to see a 47.2 percent growth in its Gross Domestic Product (GDP) by the end of this year.

The International Monetary Fund (IMF) has revealed that Guyana will see positive growth, although the global economy entered 2022 in a weaker position than previously expected.

In its most recent edition of the World Economic Outlook released on Tuesday, the IMF said the spread of the Omicron COVID-19 variant earlier this year, forced countries to reimpose restrictions on movement.

Rising energy prices and supply disruptions have also resulted in higher and more broad-based inflation than anticipated, especially in the United States and many emerging markets and developing economies.

And while countries are slowly easing restrictions put in place to counter the pandemic, the IMF said global growth is still expected to slow significantly in 2022, largely because of the war in Ukraine.

Guyana has not been spared by either the economic harshness engendered by the COVID-19 pandemic or the war between Russia and Ukraine. 

However, the President Dr. Irfan Ali-led Government has taken a formidable hold on the country’s economy, making strategic moves to ease the burden on especially the most vulnerable Guyanese.

Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh had projected the GDP earlier this year. He said the projected growth would be fueled by oil production increases from the Liza Unity floating production, storage and offloading (FPSO) vessel, as well as the Liza Phase Two project which will be set in place by the first half of the year.

“In the oil and gas subsector, production is expected from both Liza Destiny and Unity FPSOs, and the rate of production for 2022 is expected to be approximately 257,000 bpd [barrels per day] on average,” Dr. Singh had said in his budget speech.

He said the non-oil economy is also expected to continue registering strong growth, projected at 7.7 percent this year, and driven mainly by rebounds in rice growing and gold mining, and continued expansion in construction activity and wholesale and retail trade and repairs.

The rice sector is also expected to expand by 25.1 percent in 2022, due to replanting efforts and the introduction of new high-yielding varieties, representing a significant rebound from the 20.5 percent decline observed in 2021.

The large gold mining sub-sector is anticipated to grow by 12.2 percent due to higher expected declarations from one large operation, and the small and medium-scale miners. 

This also represents a significant comeback from this sector’s 2021 performance, which saw an estimated contraction of 14.8 percent.

In construction, the finance minister said that its continued heavy investment in projects across sectors, and major projects coming from private sector investments, will result in a projected expansion of 10.5 percent.

The government has already set aside $5 billion in this year’s national budget for cost-of-living adjustments.   The Ministry of Agriculture’s farmers’ market initiative has been easing the financial burden faced by many families across the country.

Since 2020, the government has put several measures in place to ensure disposable income remains in the pockets of Guyanese. 

These include the removal of Value Added Tax (VAT) from water and electricity, the continual increase in old-age pension and public assistance, and the restoration of the ‘Because We Care’ cash grant and school uniform cash grant which now stands at $30,000 for each child in both public and private schools.

Late last month, the government slashed the incise tax on diesel and gasoline to zero percent, further reducing economic hardships on Guyanese.

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