Sunday, January 29, 2023

Guyana’s non-oil economy remains positive revenue earner alongside booming oil industry

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Though Guyana’s oil sector is projected to account for nearly 60% of Gross Domestic Product (GDP) for 2022, the government’s intent to have an economy built on a diversified stream of revenues is bearing fruit. According to the Ministry of Finance’s 2022 Mid-Year Report, Guyana’s non-oil economy delivered a creditable performance, registering an 8.3 percent growth rate.

The government’s prudent management of its traditional sectors especially in the face of external shocks from the Russia-Ukraine war paved the way for noticeable improvements in the areas of agriculture, forestry, and mining.

Rice and sugar demonstrated marked reductions in production in the first half of 2022, when compared to the same period in the previous year, on account of disastrous floods encountered in 2021, among other things. However, the other crops subsector is estimated to have expanded significantly by 27.7%. OilNOW understands that this growth is attributed to increased production across all crop categories with reported increases in cultivation. Given the magnitude of the recovery in the first half of the year, the subsector’s growth projection has been upgraded to 17.9% for the full year.

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As for the livestock industry, this is estimated to have grown by 4.2% when compared with the first half of 2021. The subsector is now projected to grow by 5.1% this year.

The forestry sector grew by an estimated 47.1% in the first half of the year, largely on account of significant growth in log production. The expected growth rate for the sector is maintained at 13.5% for 2022.

Furthermore, it was noted that the bauxite industry expanded by 31.9% in the first half of the year. At the end of June, production stood at 343,922 tonnes, compared with 291,560 tonnes in the first half of last year. Projected growth rate for the industry has been upgraded to 37.5% this year.

Though the gold mining industry declined by an estimated 1.5% in the first half of this year, on account of lower declarations from the small and medium scale miners, declarations from the single producing foreign operator exceeded last year’s half-year output by 111.1%, to reach 47,772 ounces. The industry is now expected to grow by 7.4% this year.

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The other mining and quarrying industries are estimated to have expanded by 36.3% in the first half of the year. Diamond declarations, like sand, recorded significant improvement over last year, increasing from 18,432 metric carats in the first half of 2021, to 49,016 metric carats this year. Also boosting is the production of manganese for the first time in decades. The other mining and quarrying industries are now projected to grow by 11% this year.

Overall non-oil growth for the full year is projected at 9.6%. With this, even when not counting oil, Guyana will grow faster than most countries, on a percentage basis. This is even as the disruptions from the Russia-Ukraine war threatens many other countries with economic recession.

With supportive measures in place to continue increasing economic activity, overall GDP growth for 2022 is now projected at 56%.

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