Following key discussions with authorities here, the International Monetary Fund (IMF) said in a report yesterday that it is clear Guyana’s medium-term prospects are more favorable than ever before, with increasing oil production having the potential to transform Guyana’s economy.
Specifically, the financial institution said oil production, which currently stands at approximately 340,000 barrels of oil per day from the Liza Phase One and Liza Phase Two projects, is expected to increase significantly with the coming onstream of two more large oilfields in the Stabroek Block during 2022-26. These pertain to Payara which begins first oil in 2023 and Yellowtail which kicks off in 2025. Together, Guyana’s oil production capacity would surpass 800,000 barrels of oil per day.
The IMF said, “Guyana’s commercially recoverable petroleum reserves are estimated to be well over 11 billion barrels, the third-largest in Latin America and the Caribbean, and one of the highest levels of oil reserves per capita in the world. This could help Guyana build up substantial fiscal and external buffers to absorb shocks while addressing infrastructure gaps and human development needs.”
The financial institution warned however that increased dependence on oil revenues will expose the economy to volatility in global oil prices. It said too that a slowing global economy and the repercussions of the war in Ukraine could also adversely affect non-oil exports. On the other hand, the IMF said higher global oil prices and additional gas and oil discoveries could significantly improve Guyana’s long-term economic prospects.
The IMF’s perspective in this regard was outlined in its Concluding Statement, a document that describes the preliminary findings of IMF staff at the end of an official staff visit or ‘mission’, in most cases to a member country.
These missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement. The agreement states that these meetings are done in the context of a request to use IMF resources, as part of discussions of staff monitored programmes, or as part of other staff monitoring of economic developments.
Guyana Standard understands that IMF staff met with Finance Minister, Dr. Ashni Singh; Minister of Parliamentary Affairs and Governance, Gail Teixeira; Central Bank Governor, Dr. Gobind Ganga, other senior officials, representatives from the private sector, banks, the opposition party, labor unions, and other stakeholders, including Guyana’s international development partners.
The IMF Executive Board is expected to discuss Guyana’s Article IV consultation on August 3, 2022.
The Fund was keen to note that it stands ready to assist the authorities’ capacity development needs. This includes technical assistance on macroeconomic and fiscal management, development of financial market infrastructure, and strengthening of statistical capabilities.
