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Guyana’s oil helps spur regional economic growth – CDB official
CDB Director of Economics, Ian Durant
Kaieteur News – The Caribbean Development Bank’s (CDB) 2024 Annual Conference, held on Tuesday, shed light on the significant role of Guyana’s increased oil production played in driving economic expansion across the region.
In his address, Ian Durant, CDB’s Director of Economics, highlighted the impacts of various global challenges and opportunities on the Caribbean economies, highlighting the pivotal role of sectors like oil and tourism in shaping the region’s economic trajectory. He delivered an overview of the region’s economic performance in 2023 and outlined forecasts for the year ahead.
“Our borrowing member countries have faced several disruptions to social and economic progress. Including the COVID 19 pandemic, and consequent deterioration in macroeconomic conditions,” Durant said. To this end he highlighted the challenges caused by geopolitical tensions like Russia’s invasion of Ukraine.
According to Durant, Caribbean nations showcased resilience, with an average growth rate of 6.7% in 2023. However, this marked a slowdown from the exceptional 11% growth recorded in 2022, signaling a return to pre-pandemic norms by the end of 2023. The standout in the region was Guyana, where higher oil production fueled a remarkable expansion of its economy in 2023.
Durant said, “Higher oil production in Guyana was a significant driver of average regional growth in 2023. Production increased by 35.2% influencing growth in the non-energy sectors and contributing to an overall expansion of Guyana’s economy of 32.9%.”
He continued, “Economic activity and in other commodity exporters, Suriname and Trinidad and Tobago also expanded, but at a more measured rate with the energy sector in Trinidad and Tobago recording a slight contraction.” Moreover, he underscored that the tourism industry, which is vital for many Caribbean nations, played a crucial role in driving economic recovery, buoyed by robust demand from major source markets such as the United States.
However, he said challenges persisted. Durant noted that across the region, efforts to address inflation and food and energy security remained ongoing, with governments implementing measures to mitigate the impact on vulnerable populations.
Moreover, Durant stated too that the region’s average debt-to Gross Domestic Product (GDP) ratio will continue to trend downwards after spiking in 2020 at the onset of the COVID-19 pandemic. Looking ahead, he said the CDB forecasts an average growth rate of 8.6% for its 19 of its borrowing member countries in 2024, largely attributed to Guyana’s increased oil production and the continued expansion of the tourism industry. However, he said excluding Guyana, the growth projection falls to 2.3%, reflecting broader trends of slowing global growth and the normalization of economic conditions in the Caribbean.
Durant explained that the outlook remains susceptible to various downwards risks, including sluggish global growth, persistent inflationary pressures, geopolitical conflicts, and climate change-related disasters. “Escalations in existing geopolitical conflicts or the emergence of new ones could disrupt stability, consumer confidence and investments, (which are) critical elements for sustaining economic growth,” Durant noted.
He continued, “These events may also trigger supply chain disruptions and rekindle volatility in global commodity prices, necessitating additional monetary tightening that could weaken external travel demand from the region’s primary source markets. Additionally, challenges linked to climate change, including natural disasters pose risk to the region.”
Additionally, Durant stated that in order to achieve sustained economic growth and resilience, there is the need for strategic investments in infrastructure, digitalization, human capital development, and sustainable energy sources. He added that the Bank is committed to supporting its member countries through various interventions in order to accommodate some of the critical spending needed to accelerate development.
- (CDB), GDP, Guyana, Ian Durant, oil
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