With the Guyana government accelerating the implementation of several reform programmes alongside the unparalleled expansion of the oil sector, the International Monetary Fund (IMF) finds that the country will continue to see very rapid growth. In fact, the financial institution believes the outlook for medium-term growth “is better than ever before.”
This much was noted by the institution in its Concluding Statement issued on Monday. That document followed discussions held from August 28 to September 11 for the IMF’s 2023 Article IV Consultation. Such missions are held annually to better understand a member state’s economic well-being. The IMF said its staff met with Vice-President Dr. Bharrat Jagdeo, Finance Minister Dr. Ashni Singh, Minister of Parliamentary Affairs and Governance Gail Teixeira, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, banks, labour unions, and other stakeholders.
Following those engagements, the IMF noted that Guyana saw a number of commendable economic achievements for 2022. Chief among these it said was the registering of a 62.3% growth in real Gross Domestic Product (GDP). The IMF said this is not to be taken lightly as it was the highest such recording in the world.
The IMF also took note of the nation’s oil sector performance which it said will see production ramping up with the coming onstream of a third oil field later this year in the ExxonMobil-operated Stabroek Block. Exxon’s current production at the Liza Phase 1 and Liza Phase 2 projects is close to 400,000 bpd. The third oil project called Payara will take production over the 600,000-bpd mark.
The financial institution was also keen to highlight the creditable performance of the country’s non-oil sector. It said, “The non-oil sector is supported by the implementation of a fast-paced public investment programme focused on providing transportation, housing, and flood management infrastructure, and raising human capital.
“Spillovers from oil and construction are supporting growth in the services and supplies sectors, while agriculture, mining and quarrying are also performing well,” the IMF said.
After a strong 2022, the IMF said in the first half of 2023, real non-oil GDP continued its stellar performance as it grew by 12.3%.
In terms of the country’s outlook, the IMF said, “Oil production will continue to expand rapidly as three new approved fields will come on stream between 2024-27, and a sixth field is expected to come on stream in the first half of 2028. Sustained real non-oil GDP growth of 5.5% is projected, as the government continues its ambitious plans to address developmental needs.”
While Guyana’s medium-term growth prospects are favourable, the IMF still urged authorities to be mindful of downside risks. These, it said, include inflationary pressures and the appreciation of the real exchange rate, overheating, and the crowding out of credit to the private sector.
It also warned that adverse climate shocks, and volatile or lower than projected commodity prices, may also negatively impact the economy.