Guyana’s economy is poised for substantial growth, more than doubling by 2028, fueled by lucrative profits from oil production and the export sector, according to CNBC. The country, situated between Venezuela and Suriname, is expected to experience an “extremely fast” expansion, with a projected 38% increase by the end of this year, as forecasted by the International Monetary Fund (IMF). In fact, Guyana witnessed the highest GDP growth rate in the world last year, hitting 62.3% based on IMF statistics. Echoing the IMF’s projections, Fitch Solutions research unit BMI also anticipates explosive growth for Guyana this year.
Andrew Trahan, the head of Latin America country risk at BMI, believes that Guyana’s real GDP will surge by approximately 115% over the next five years. He mentions that the exact magnitude of this increase will depend on how quickly additional oil production is brought online. Trahan notes that the discovery of new offshore fields in Guyana’s Stabroek Block is expected to propel oil production from around 390,000 barrels per day this year to over a million barrels per day by 2027.
“The robust growth in Guyana has been, and will continue to be, driven by a rapid expansion of oil production following a series of discoveries in recent years,” Trahan affirms, highlighting that higher oil production will enhance Guyana’s net exports. He predicts that Guyana will once again be the fastest-growing economy in the world in 2023, retaining the title for at least the next two years.
Nevertheless, amidst this positive outlook, some experts have issued warnings about potential risks that could impede Guyana’s growth. Valerie Marcel, an associate fellow at think tank Chatham House, emphasizes the importance of diversifying the country’s economy. While acknowledging Guyana’s exceptional growth, Marcel points out that oil prices are likely to be volatile and eventually remain low, necessitating the need for economic diversification.
In addition to its booming oil sector, Guyana’s non-oil industries, such as transportation, housing, agriculture, mining, and quarrying, have also been experiencing growth, as outlined in the IMF report. This diversification has contributed to the country’s overall economic expansion.
As Guyana advances on its path to rapid economic growth, it is crucial for the nation to mitigate any potential vulnerabilities and ensure long-term sustainability. Diversification efforts will enable Guyana to reduce reliance on volatile oil markets and build a more resilient economy. By harnessing the opportunities presented by its expanding oil production, combined with investment in other sectors, Guyana can pave the way for a prosperous and stable future.
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