The International Monetary Fund’s (IMF) Article IV Consultation Report from December 2023 forecasts 26.6% growth in Guyana’s economy for 2024, following a 38.4% projected expansion in 2023.
While the IMF’s report was positive, it warned the economy could become overheated, leading to inflationary pressures and appreciation of the real exchange rate beyond the level implied by a balanced expansion of the economy. The IMF also warned of the risks of highly volatile commodity prices, adverse climate shocks, and governance concerns.
Guyana’s anticipated growth is largely attributed to the oil sector, with oil production expected to surge by 35.1% in 2024. The commencement of the Payara project in November 2023 is a key driver, anticipated to reach its peak output of 220,000 barrels per day (bpd) in early 2024.
Guyana’s non-oil gross domestic product (GDP) is also expected to grow by 6.6%, following a 9.1% increase in 2023. This growth is expected to be propelled by the ripple effects of the oil sector’s expansion, increased government spending from rising oil revenues, and growth in the construction and hospitality sectors. The average oil production in Guyana for 2024 could exceed 600,000 bpd, up from approximately 380,000 bpd in 2023. In light of this, the IMF’s growth projection for the oil sector may be conservative.
Vickram Bharrat, Guyana’s Minister of Natural Resources, expressed hope for an early start of the Yellowtail project by the end of 2024. The general expectation is that the project will start in 2025. However, Bharrat’s expectation aligns with ExxonMobil’s trend of earlier-than-anticipated project commencements. Notably, the Payara project’s ramp-up has also been faster and smoother than expected, suggesting potential for earlier future production optimization.
President Irfaan Ali has outlined the government’s 2024 development plan focusing on improved infrastructure and public services, including enhancements in water, housing, and education sectors. The 2024 budget, expected in late January or early February, will provide further insight into the government’s economic projections and policy impacts for the year.
