The main driver of Guyana’s GDP in the medium term continues to be oil exports, which the International Monetary Fund (IMF) estimates will represent 38.2 percent of GDP in the 2020 –2021 period. This is according to the Inter-American Development Bank’s (IDB) Caribbean Quarterly Bulletin report released over the weekend.
Although the non- oil economy contracted by 7.3 percent in 2020, the agriculture sector expanded by 4.1 percent, led by 4.8 percent growth in the rice sector and 6.6 percent in a variety of crops making up almost 11 percent of GDP.
The service s sector, which makes up a quarter of the economy, contracted by 9.4 percent.
The IDB said in its report the new oil economy has rebalanced as follows: oil and gas represented 36 percent of GDP in 2020, followed by services at 25 percent (down from 40 percent), agriculture at 18 per cent (down from 25 percent), and gold production at 7 percent (down from 11 percent).
“GDP growth of the non- oil sector was originally projected to expand by 6.1 percent, but that could now be subject to revision considering the current context of heavy flooding in Guyana since the end of May,” the IDB said.
Heavy rains starting at the end of May contributed to flooding in river communities throughout Guyana. The government estimates approximately 52,000 households have been affected, and around 200 people were relocated to temporary shelters.
The IDB said revenue growth is expected to reach 16 percent in 2021, compared to the 6.2 percent decline in the previous year. On the other hand, expenditures represented 29 percent of GDP in 2020 and are expected to average almost 20 percent of GDP in 2021– 2026. Total expenditures were estimated to have increased by 14 percent in 2020 and are projected to continue increasing by 12 percent in 2021.
Guyana began producing oil at the ExxonMobil operated Stabroek Block in 2019. Production is expected to surpass the 1 million barrels per day mark by the end of the decade as multiple developments offshore come online.
