Investments being made in Guyana’s growing oil and gas sector have resulted in a capital account surplus in 2019–the year that the South American nation achieved first oil.
Guyana’s Minister of Public Works, Juan Edghill, highlighted the performance of the oil and gas sector in his 2020 Budget Speech where he presented the 2020 estimates, under the caption; Our Plan for Prosperity: Protecting our People in a COVID-19 Environment; Strengthening Democracy and the Rule of Law; Incentivising Economic Growth and Job Creation; and, Enhancing Welfare.
“The capital account recorded a substantially larger surplus, of US$1.8 billion in 2019, 36 percent higher than in 2018,” he stated. “This was mainly on account of increased foreign direct investments in the growing oil and gas sector. Foreign direct investments increased by US$463.6 million in 2019, when compared with 2018.”
He further highlighted that in 2019, the overall balance of payments registered a deficit of US$48.9 million, lower than the deficit of US$132.2 million in 2018. “This was on account of an increase in the capital account surplus, which offset an expansion in the current account deficit.”
The current account deficit was US$1.8 billion in 2019, 25.3 percent higher than the deficit in 2018, mainly on account of a larger deficit on the merchandise trade account. A larger services account deficit also contributed to the higher current account deficit position.
Further, Edghill pointed out that the mining and quarrying industry was led by the oil and gas sector.
“Mining and quarrying industries expanded by 10.6 percent in 2019, driven by the emerging petroleum and gas and support services industry, which grew by 124.2 percent over the previous year,” he stated. “This was further supported by growth in gold mining, by 3 percent, other mining and quarrying, by 7.3 percent, and bauxite, by 1.7 percent.”