Oil locks Guyana in “boom cycle”; forecast to achieve world’s highest GDP growth rate
Guyana’s development partner, the World Bank, has noted that the South American nation is locked in a “boom cycle” due to its oil resources and is therefore projected to achieve the highest Gross Domestic Product (GDP) growth rate in 2022.
In its latest Global Economic Prospects Report, the financial institution said, GDP was 21.2% last year while it is projected to climb to 49.7% this year on account of the Liza Phase Two Project coming on stream in the first quarter.
Importantly, World Bank statistics show that no other country in Africa, Asia, Europe, the Middle East, Caribbean, or even the Latin American Region is projected to come as close to Guyana’s GDP forecast for 2022.
Similar conclusions were also made by the Economic Commission for Latin America and the Caribbean (ECLAC) which said Guyana recorded a 18.5% GDP growth rate in 2021 and is poised to reach 46% this year based on its calculations.
While Guyana is poised to enjoy rapid GDP growth, the 2022 outlook for many parts of the world is still grim. After rebounding to an estimated 5.5 percent in 2021, the World Bank said global growth is expected to decelerate markedly to 4.1 percent in 2022, reflecting continued COVID-19 flare-ups, diminished fiscal support, and lingering supply bottlenecks.
The financial institution said the near-term outlook for global growth is somewhat weaker, and for global inflation notably higher than previously envisioned, owing to pandemic resurgence, higher food and energy prices, and more pernicious supply disruptions.
OilNOW understands that global growth is projected to soften further to 3.2 percent in 2023, as pent-up demand wanes and supportive macroeconomic policies continue to be unwound. Although output and investment in advanced economies are projected to return to pre-pandemic trends next year, in emerging market and developing economies (EMDEs)— particularly in small states and fragile and conflict -afflicted countries—they will remain markedly below, the World Bank stated, owing to lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic.
Over the longer term, it said EMDEs will need to buttress growth by pursuing decisive policy actions, including reforms that mitigate vulnerabilities to commodity shocks, reduce income and gender inequality, and enhance preparedness for health- and climate-related crises.