The International Monetary Fund has cut its growth projection in half for new oil producer Guyana to 26% for 2020 – still the fastest in the world – and forecasts 8% growth in 2021 and 29% in 2022.
Caribbean Economist, Marla Dukharan, said in her November Caribbean Monthly Economic Report that Guyana’s oil GDP increased by 45.9% in H1 2020, while non-oil GDP contracted 4.9% y/y.
Transport and storage declined 25% y/y, wholesale and retail declined 15%, and accommodation and food services declined 33% while agricultural output fell 4.1% y/y.
“Construction activity dropped 5.6% y/y, due to a lack of fiscal stimulus and weaker private sector activity. The Balance of Payments deficit narrowed by 83% y/y, falling to USD14.9 million,” Dukharan said. “A high merchandise trade surplus from oil, gold and rice exports was insufficient to produce a current account surplus but mitigated the narrower capital account surplus based on outflows of oil revenue to the Natural Resource Fund and oil companies.”
She said international reserves ended June at USD573 million or 1.7 months of imports, strengthening in August to USD649 million.
“A fiscal deficit of GYD4.5 billion was recorded in H1 2020, versus a surplus of GYD2.5 billion a year prior, as revenues declined, based on both COVID-19 and the elections impasse,” the Economist said. “Public debt increased 1.3% y/y to USD1.68 billion. Gross govt debt/GDP remains low, forecast by the IMF to end 2020 at 37%.”
According to figures from the Bank of Guyana’s Half Year Report, the petroleum and gas, and support services industry expanded by 4,712.9 percent in H1 2020. The industry recorded crude oil production of 12,349,835 barrels, with an average output per day ranging between 65,000 and 75,000 barrels.
“However, this performance was 38-46 percent lower than the 120,000 barrels per day targeted during the review period,” the Bank of Guyana said. “The petroleum and gas industry was faced a sharp drop in oil prices from depressed demand and higher inventory of crude oil as a result of the COVID-19 pandemic’s adverse effect globally.”
Guyana is set to lift its fourth and final 1-million-barrel shipment of Liza Crude for 2020, next month.
