The International Monetary Fund (IMF) said on Monday that it anticipates a vigorous economic surge for Guyana, buoyed by the government’s extensive modernization plans as well as the expansion of the oil sector. After the recent 2023 Article IV Consultation from August 28 to September 11, the IMF made the said conclusion while also confirming a record-breaking real Gross Domestic Product (GDP) growth of 62.3% for Guyana in 2022.
This robust performance it said is projected to surge by an impressive 38% in 2023. A significant driver behind this growth is the escalating oil production, notably with the third oil field, Payara, set to come on stream later this year.
In addition to oil, the IMF said Guyana’s non-oil sector flourished under a brisk public investment scheme, emphasizing infrastructure development, housing, flood management, and human capital elevation. The spillover effects from oil and construction positively influenced the service and supply sectors. Furthermore, traditional sectors like agriculture and mining are showing promising results.
The IMF acknowledged also, the Guyanese authorities’ fiscal discipline and advocated for a comprehensive medium-term fiscal framework. Such a structure would include a clear fiscal anchor, a transition path, and a set operational target, ensuring macroeconomic stability.
The financial institution said too that Guyana’s oil regulatory framework has seen progressive reforms. The 1986 Petroleum Exploration and Production Act was overhauled and ratified in August 2023. This legislation amplifies oil exploration and production regulations, further opening avenues for the oil and gas industry.
Looking forward, the IMF remains optimistic. Between 2024-2028, an additional three oil fields are set to activate, with another anticipated by mid-2028. The non-oil GDP is also expected to remain steady at 5.5% as the government pushes its developmental agenda.
Even with such a stellar trajectory, the IMF urges caution, highlighting potential risks. Factors like climate adversities, and fluctuating commodity prices might pose challenges to the economic trajectory, it said.
Despite these potential pitfalls, the overall outlook for Guyana remains promising, setting the stage for unprecedented development and prosperity.