Oil sector drives 59.5% growth in GDP during first half of 2023 – Mid-Year Report

Sep 10, 2023 ExxonMobil, News, Oil & Gas

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…gold, bauxite and fisheries sector decline, non-oil sector expands by 12.3%

Kaieteur News – President Irfaan Ali yesterday revealed that the country recorded a 59.5 percent growth in Gross Domestic Product (GDP) during the first half of 2023, with the non-oil sector also expanding by 12.3 percent.

According to the Mid-Year Report officially released by the Ministry of Finance on Saturday, the growth in GDP was largely driven by the petroleum sector. The report highlighted that the outlook for 2023 remains positive as an overall real GDP growth for 2023 is now forecasted at 28.2 percent, with non-oil growth projected at 9.3 percent.

According to the Report, the oil and gas subsector almost doubled its performance in the first six months of 2023 when compared with the same period last year. It was explained that the sector grew by an estimated 98.4 percent during the first half of the year. The Ministry of Finance reported, “At the end of June, total crude oil production stood at 68.7 million barrels, compared with 34.6 million barrels in the same period of last year.”

It went on to note that Guyana’s second Floating Production Storage and Offloading (FPSO) Vessel, the Liza Unity which commenced production on February 11, 2022 ramped up to a daily production of about 227,000 barrels per day. With the third FPSO, Payara, expected to come on stream in the last quarter of this year, the sector is now expected to grow by 39.6 percent this year.

On the other hand, production of bauxite reduced during the first six months of 2023 by 11.1 percent. Production fell from 343,922 tonnes in the first six months of 2022 to 277,356 tonnes during the same period of this year.

“This performance is driven by lower year-on-year output from both producers amid weak world market conditions, combined with marketing, demand and technical challenges,” the government reported. It added that the sector is expected to perform better in the second half of 2023; however, it is projected to contract by 3.2 percent by year end.

Suffering a similar decline was the gold mining sector, contracting by 11.4 percent during the first half of the year. The Ministry of Finance explained that the reduction was “due to lower declarations from the small- and medium-scale miners.” It reported that at the end of June, gold declarations stood at 209,756 ounces, compared with 236,728 ounces during the same period last year.

The lone large-scale producer is said to have increased declarations by 6.1 percent. The government projects the gold mining sector to now grow by 5.3 percent in 2023.

On the agriculture, forestry and fishing fronts, government boasted that the industry expanded by 7.6 percent during the first half of the year. The Ministry of Finance said that the sugar industry expanded by 30.1 percent when compared with the same period last year. It explained that the Guyana Sugar Corporation (GuySuCo) produced 17,034 tonnes of sugar during the period, compared with 13,089 tonnes during the first half of 2022. Government therefore projects that a total of 60,858 tonnes of sugar will be produced by year end, accounting for a 29.3 percent growth this year.

In the rice industry, production is estimated to have expanded by 3.2 percent. The Guyana Rice Development Board (GRDB) has reported production of 302,295 tonnes of rice equivalent, compared with 290,780 tonnes in the first half of last year. The Mid-Year report indicated that the sector is expected to grow by 7.4 percent by year end.

Meanwhile, fish production suffered a further decline during the first half of 2023, contracting by 8.7 percent when compared with the same period last year. The report said the decline in production was as a result of reduced fishing activities amid the growing presence of sargassum in the country’s waters. It was compounded by a major operator not working for an extended period in the beginning of the year, the Ministry said.

It however reported that shrimp production expanded by 49.5 percent to reach 9,351 tonnes in the first half of this year.

Meanwhile, the forestry sector recorded a 4.5 percent increase during the first six months of 2023. The Ministry of Finance said at the end of June, 209,238 cubic metres of timber products were produced, compared with 203,220 cubic metres during the same period last year. The sector is forecasted to grow by four percent by year end.

Notably, the construction sector recorded a growth of 44.1 percent during the first half of 2023, while the manufacturing sector expanded by 17.7 percent, boasting improved performances in all subcategories.

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• decline, Gross Domestic Product, Mid-Year Report, non-oil, sector

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