GEORGETOWN, Guyana, CMC – Guyana registered economic growth of 62.3 percent last year, with Finance Minister Dr. Ashni Singh Monday saying the country “would be the fastest growing economy in the world in 2022”.
Delivering the 2023 national budget to the National Assembly under the theme “Improving lives today; building prosperity for tomorrow,” Singh, in a review of the country’s economic performance over the past year, said the economic growth was a result of a “greater than expected” performance in the local oil and gas sector.
“At 62.3 percent overall, Guyana would be the fastest growing economy in the world in 2022,” Singh said, noting that the petroleum sector expanded by 124 percent last year.
The non-oil economy also expanded by 11.5 percent.
“At the time of budget 2022, it was expected that Real GDP (Gross Domestic Product) would grow by 47.5 percent, with the non-oil economy expected to expand by 7.7 percent. As the year ensued, the oil and gas sector performed better than expected.
“At the same time, our government’s policies continue to focus on supporting the economy’s traditional and new and emergent non-oil pillars, helping to ensure stronger and more broad-based growth than originally anticipated,” Singh said.
The Finance Minister told legislators that the agriculture, forestry, and fishing sectors collectively increased by 11.9 percent last year. The mining and quarrying sector grew by 109.7 percent, a performance driven mainly by an expansion in the oil and gas and support services industry, which, combined with growth in the other mining and bauxite industries, outweighs the contraction in gold mining activity.
Gold mining contracted by 2.5 percent last year, stemming from the lowered output from small and medium-scale producers. The bauxite mining industry saw a 35 percent growth, while manganese production recorded a record 225.081 tonnes last year for the first time in the previous five decades.
The construction sector also expanded by 26.3 percent last year, and the manufacturing industry grew by 3.9 percent. The local services sector also expanded by nine percent last year.
In his presentation, Singh said oil ships operating offshore Guyana produced 102 lifts of one million barrels of crude oil. The government got 13 rides of that number, earning more than one billion US dollars in revenues from 11 of the 13 lifts.
Singh said US$510.2 million was earned from the Liza Destiny Floating Production Storage and Offloading (FPSO), the oil ship operating in the Liza Phase 1 development of the Stabroek Block. The remaining US$588.9 million was earned from lifts made by the Liza Unity, the oil ship operating in the Liza Phase 2 development.
Additionally, US$155.2 million was received in royalty payments from the only producing operator- Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s local subsidiary.
But even as Singh outlined economic growth for Guyana, he warned that the country should brace itself for a global recession in 2023.
He also warned of a general decline in the prices of Guyana’s primary exported commodities this year.
“Rice and sugar prices are expected to fall by 0.4 percent and 6.8 percent, respectively, to US$435 per metric tonne and US$0.38 per kilogram,” Dr. Singh said, adding that the sugar sector is estimated to have declined by 18.9 percent in 2022, with sugar production for the year totaling 47,049 tonnes.
Metal prices are also expected to fall in 2023, with aluminum prices expected to average US$2,400 per metric tonne or 11.3 percent lower than in 2022, and gold prices are expected to decline by 5.6 percent to US$1,700 per troy ounce.
Singh said that most recent forecasts suggest that crude oil prices are projected to average US$83.1 per barrel in 2023, a decline of about 17 percent year-on-year, even as prices are expected to remain above its five-year average of US$60 per barrel.
“The commodity price outlook is heavily tilted on the downside for key commodities produced and exported by the Guyanese economy,” Singh said.
The government has also allocated four billion dollars to the Guyana Sugar Corporation (GuySuCo), with Singh saying this year’s allocation is expected to support the commencement of the construction of the Albion Packaging Plant and the expansion of the capacity of the Blairmont Packaging Plant.
“We have also targeted the acquisition of a drying machine to improve the quality of our packaged sugar and a stick packaging machine to offer a new smaller packet of sugar to meet the needs of premium markets.”
In December 2022, the Parliamentary Committee of Supply approved one billion dollars in supplementary funding for GuySuCo to help retool sugar estates.
The Finance Minister also announced that new pump stations would be constructed at Meten-Meer- Zorg, Jimbo Grove, Belle Vue, and Letter Kenny and will also spend on upgrading other drainage and irrigation systems across the country.
Last year, $19.1 billion was budgeted for drainage and irrigation works.
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