GEORGETOWN, Guyana, CMC – The International Monetary Fund (IMF) Monday said Guyana’s economy continues to increase, supported by the government’s modernization plans, including the unparalleled oil sector expansion.
An IMF delegation, led by senior economist Alina Carare, has ended a two-week visit here, holding discussions with various stakeholders, including Vice-President Bharrat Jagdeo, Finance Minister Dr. Ashni Singh, as well as the Central Bank Governor Gobind Ganga, and representatives from the private sector and labor unions.
The IMF said that following record actual gross domestic product (GDP) growth in 2022 of 62.3 percent, the highest in the world, “real GDP is expected to continue to grow extremely fast in 2023 at 38 percent”.
It said oil production is ramping up with the coming onstream of a third oil field, and growth in the non-oil sector is supported by implementing a fast-paced public investment program focused on providing transportation, housing, and flood management infrastructure and raising human capital.
Oil and construction spillovers support growth in the services and supplies sectors, while agriculture, mining, and quarrying also perform well.
The IMF said that after a strong 2022, in the first half of 2023, real non-oil GDP grew by 12.3 percent. It said inflation reached 7.2 percent at the end of 2022, in line with other countries in the region, and declined to 1.2 percent on a year-on-year basis in July 2023, with the decline in transportation and communication prices.
The Washington-based financial institution said the external current account swung into a large surplus in 2022 of 23.8 percent of GDP, and another ample rest is expected in 2023. Banks are well-capitalized and liquid.
The IMF said that the outlook for medium-term growth is better than ever.
“Oil production will continue to expand rapidly as three new approved fields will come on stream between 2024-27, and a sixth field is expected to go in the first half of 2028.
“Sustained real non-oil GDP growth of 5.5 percent is projected as the government continues its ambitious plans to address developmental needs. Guyana’s favorable medium-term growth prospects are accompanied by upside and downside risks.”
The IMF said on the upside further oil discoveries would continue to improve growth prospects.
It said construction growth and public solid investment might support higher than expected short-term non-oil growth but could also lead to inflationary pressures and the appreciation of the real exchange rate beyond the level implied by a balanced expansion of the economy, overheating, and the crowding out of credit to the private sector.
Adverse climate shocks and volatile or lower-than-projected commodity prices may also negatively impact the economy.
The IMF said that the fiscal and monetary policy mix is appropriate now, and the current expansionary fiscal policy stance is correct, given the country’s development needs and the existing slack in the economy.
“Although there was robust employment growth in the oil, services, and construction sectors, the unemployment rate was 12.4 percent in 2022, and staff estimates show that the output gap remains negative.
Monetary policy appropriately balances the expansionary fiscal stance. The increase in broad money of about 10 percent until June 2023 (since December 2022) and in credit to the private sector of about 5 percent in the same period remains below the nominal growth of the non-oil economy.
“Although credit to the government is also increasing, it is not crowding out credit to the private sector. Bank of Guyana is monitoring macro-financial risks with eight indicators, including credit-to-GDP measures and the systemic risk matrix,” the IMF said.
and then  Monday said Guyana's economy continues to increase, supported by the government's){kind=link}