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Guyana’s GDP growth rate to slow in next five years – IMF
Kaieteur News – Guyana as a country has over the past four years been experiencing unprecedented growth in its Gross Domestic Product (GDP), specifically as a result of its still nascent oil and gas industry. This trajectory, has since been revised and is now projected to decline in the coming years.
According to the most recent International Monetary Fund World Economic Outlook report for 2024, the International Financial Institution said while Guyana’s GDP is projected to grow by 33.9 percent for this year, by next year its growth rate will slow down to 18.7 percent.
The country’s economic growth rate projected for 2029, by which time Guyana will be pumping in excess of 1.3 million barrels of oil per day, is projected at just 11.9 percent. Guyana following its first year of oil production in 2020 saw its GDP skyrocket to 43.5 percent but tapered off to 20.1 percent the following year. With the coming on stream of a second Floating Production Storage and Offloading (FPSO) vessel in the Stabroek Block, GDP for 2022 rose to a record-breaking 62.3 percent.
Meanwhile as it relates to the country’s Consumer Price Index (CPI)—a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services—this is expected to double by next year. According to the IMF’s report, the country’s CPI is projected to decrease to 2 percent this year up from the 4.5 percent increase the previous year, but by next year—2025—the country’s cost of living index forecast an increase to 4.6 percent. By 2029 however, the CPI index according to the CPI, is projected to reach a staggering 5.5 percent increase.
It would be apposite to note that Minister with responsibility for Finance Dr. Ashni Singh, in presenting the estimates for this year had observed at the time of preparing Budget 2023, it was projected that GDP would grow by 25.1 percent, with non-oil GDP expected to expand by 7.9 percent but the country exceeded expectations with Guyana’s real GDP having grown by 33 percent overall in 2023, with stronger-than-expected expansion of 11.7 percent in non-oil real GDP.
In his presentation, Dr. Singh was a little more optimistic in his projection for economic growth for this year, announcing that “the Guyanese economy is set to expand at an even faster pace in 2024, with real GDP growth projected at 34.3 percent.”
As it relates to the global economy as a whole, the IMF reported that this “remains remarkably resilient, with growth holding steady as inflation returns to target.”
This, despite the supply-chain disruptions in the aftermath of the pandemic, a Russian-initiated war on Ukraine that triggered a global energy and food crisis, and a considerable surge in inflation, followed by a globally synchronized monetary policy tightening.
It was noted that “despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops.”
The IMF further expounded that the overall inflation surge—despite its severity and the associated cost-of living crisis—did not trigger uncontrolled wage-price spirals, “instead, almost as quickly as global inflation went up, it has been coming down.”
According to the IMF, on a year-over-year basis, global growth bottomed out at the end of 2022, at 2.3 percent, shortly after median headline inflation peaked at 9.4 percent.
As such, “according to our latest projections, growth for 2024 and 2025 will hold steady around 3.2 percent, with median headline inflation declining from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025.”
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