In a recent report, the World Bank has highlighted Guyana’s exceptional economic performance, with an astounding growth rate of 63.4% in 2022. The financial institution said this remarkable surge is expected to continue with a projected expansion of approximately 29 % in 2023 and an astonishing 38.2% in 2024.
It said the driving force behind Guyana’s economic ascent can be attributed to the robust increase in oil production, including the introduction of the third vessel, Prosperity, scheduled to commence operations by the end of 2023. With operations being executed by the US oil giant, ExxonMobil, the Prosperity floating, production and offloading (FPSO) vessel is set to have an initial production capacity of approximately 220,000 barrels of oil per day, with an overall storage volume of two million barrels. It will join the Liza Destiny and Liza Unity FPSOs, which are currently producing more than 400,000 barrels per day. This addition is expected to boost daily production to around 600,000 barrels a day by 2024.
While this is good news for Guyana, the report also highlighted the plight of the broader Caribbean. Noting that the region faces a different economic landscape, the financial institution said this is characterized by its susceptibility to natural disasters and global economic shocks, owing to its heavy reliance on tourism and commodity exports. The World Bank even noted that the COVID-19 pandemic had a disproportionate impact on most Caribbean nations, leading to Gross Domestic Product (GDP) contractions of as much as 16-20% in some countries during 2020.
The journey towards recovery however, commenced in 2021, albeit unevenly, with growth rates ranging from approximately 1% to 15%. In 2022, recovery efforts continued with varying growth rates, spanning from 4% to 15%. Encouragingly, there has been a gradual decline in debt-to-GDP ratios in most countries, including Guyana, as the recovery process unfolds.
Nonetheless, challenges loom on the horizon. In this regard, the World Bank said escalating price levels and a complex global environment present significant hurdles as countries strive to strengthen fiscal balances, reignite economic growth, and bolster their defenses against natural disasters and climate change.
Looking ahead, the report underscores the importance for Caribbean nations to effectively navigate these challenges. It said the focus must remain on building resilience and ensuring sustainable economic growth. This entails not only prudent debt management but also adaptation to a world where unpredictability is becoming increasingly commonplace.