While the war in Ukraine is having substantial effects on the Latin America and Caribbean Region via higher commodity prices and weaker global growth, Guyana on account of its oil industry is projected to lead the pack this year with the highest forecast for Gross Domestic Product (GDP) growth.
This was noted in the World Bank’s latest Global Economic Prospects report released on Tuesday.
With respect to global growth, the World Bank said this is expected to slump from 5.7% in 2021 to 2.9% in 2022— significantly lower than 4.1% that was anticipated in January. It is expected to hover around that pace over 2023-24.
Turning to Latin America and the Caribbean Region, the World Bank said growth is expected to slow sharply to 2.5% in 2022, following a post-pandemic rebound of 6.7% in 2021.
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Furthermore, growth is set to decelerate further in 2023, to just 1.9%, before picking up slightly to 2.4% in 2024. OilNOW understands that the regional slowdown reflects tightening financial conditions, weakening external demand growth, rapid inflation, and high policy uncertainty in some countries.
Additionally, Central America’s economy is forecast to expand 3.9% in 2022 and 3.5% in 2023. This moderate slowdown tracks activity in the United States, the main source of export demand and remittances.
Growth in the Caribbean is projected at 6.9% in 2022 and 6.5% in 2023, helped by recovering tourism.
For Guyana, the World Bank said the oil producing nation remains on track for a 47.9% growth rate followed by 34.3% the following year, still representing the highest growth forecast for the region.
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As for Suriname, the CARICOM state is projected to see a modest 1.8% growth rate for 2022.
Guyana currently has two floating, production, storage and offloading (FPSO) vessels operating at the Liza Phase 1 and Liza Phase 2 Projects in the Stabroek Block which spans 6.6 million acres (26,800 square kilometers). Two other oil projects are set to come on stream by 2025.
ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator of the oil-rich block with a 45% working interest. Hess Guyana Exploration Ltd. holds 30% interest, and CNOOC Petroleum Guyana Limited holds 25% interest.