Guyana’s economy will remain resilient against the effects of COVID-19, maintaining its growth trajectory, as the petroleum sector picks up steam.

This is the latest assessment of the World Bank on the country’s performance last year and projections for this year. Guyana grew at an extraordinary rate of 43.5 per cent in 2020, having completed a year of oil production.

Oil production is undoubtedly contributing significantly to local growth, but the World Bank cautioned Guyana that risks related to the management of wealth generated from the sector remain.

“Guyana will be challenged to transform its burgeoning oil wealth into human capital, physical capital, and financial assets for broad-based welfare increases,” the World Bank advised.

However, the positive spillover effects have been dampened by a deep contraction in the non-oil economy, triggered by COVID-19 mitigation measures. Despite the lingering adversities, projections remain positive, with the country set to record economic growth of 20.9 per cent at the end of 2021.

Positive projections for the year ahead

The projections are for a growth of 26.0 per cent in 2022 and 23.0 per cent in construction activities ongoing in Providence, East Bank of Demerara. Based on the latest estimates, the Gross Domestic Product (GDP) of the Latin American and Caribbean Region will be 2.6 per cent lower at the end of 2021 than it was at the end of 2019.

The World Bank, in its semi-annual report on the region said while most of the region should be enjoying strong economic rebound in 2021, Haiti and Suriname are expected to experience negative growth. On the other hand, Guyana’s growth rate will remain in the double digits, as the country’s GDP of about US$6.8 billion is expected to more than double by 2025, reaching over US$14 billion.

Guyana, a middle-income developing country, is covered by dense forests and is home to fertile agricultural lands and abundant natural resources. Gold, bauxite, sugar, rice, timber, and shrimp are among its leading exports.

However, the Caribbean/South American nation has attracted international attention after ExxonMobil made the first commercial discovery of oil offshore Guyana in 2015 and started production in December 2019. In September 2020, ExxonMobil made its 18th discovery offshore Guyana at the Redtail-1 well.

Guyana projected to be among the world’s largest per capita oil producer by 2025.

Guyana, with its estimated recoverable resources of about nine billion barrels of oil equivalents is projected to be among the world’s largest per capita oil producer by 2025.

Data from Norwegian independent energy research and business intelligence firm, Rystad Energy, suggests that close to 300 million barrels of oil equivalent have been discovered on average for each exploration well (wildcat and appraisal) drilled in the country over the past six years.

This aside, with around 16 exploration wells planned, including some in riskier frontier regions, 2021 holds a lot of promise, Rystad Energy said.

The energy research firm believes that drilling results will be eagerly watched by the services industry, as more exploration success off Guyana would translate into welcomed opportunities after the market slump of 2020.

Improving Guyanese standard of living

Considering the country’s oil revenue and other lucrative sources of income, President Dr Irfaan Ali has said that the standard of living and the quality of life must be lifted for all.

“Work will be rewarded; hard work will be rewarded even more,” he said.

According to the president, “I am confident that the steps which our Government will take in 2021 will continue to lift up our economy, and improve the fortunes of every person within our nation.”