The Caribbean Development Bank (CDB) is projecting greater economic recovery in 2022 with new oil producer Guyana leading the region’s economic growth.

Maintaining the nascent recovery that began in the latter part of 2020, the bank indicated that regional growth is expected to increase to approximately 9.1 per cent.

However, the projected out-turn is spearheaded by Guyana, which is expected to grow by 47.5 per cent, as output in the oil and gas sector continues to build momentum.

During the bank’s annual news conference on Tuesday, director of economics Ian Durant pointed out that in 2021 among commodity exporting countries, the average growth rate of 2.7 per cent was also driven by Guyana, which recorded growth of 19.9 per cent.

He added that the non-oil segment of the economy grew by 4.6 per cent.

The country has been producing oil for almost two years which has significantly bolstered the economy.

Just last month, ExxonMobil Corp — the largest US oil producer — announced that it had made two new discoveries in the Stabroek Block off Guyana’s coast, pushing the nation’s petroleum resources well over 10 billion oil-equivalent barrels.

Moreover, last week Finance Minister Ashni Singh presented a G$552.9-billion budget to Parliament, which will provide funding for a series of sectors as the country seeks to continue building on the economic growth achieved last year.

This is the first fiscal package that includes financing from the oil sector, through the use of oil revenues in the Natural Resource Fund.

In the presentation, Singh said the government will remove the value-added tax on cranes, safety equipment, and oil spill response equipment, to ensure “that as many Guyanese businesses as possible can equip themselves accordingly”.

The government will channel G$20.8 billion towards the development of the Wales Gas-to-Energy project. This ties into its pursuit of reducing the cost of electricity by over 50 per cent in the next five years.

Projecting the non-oil economy to grow by 7.7 per cent, Singh indicated that gold output was the third-largest non-oil sector of the local economy in 2021, accounting for more than 60 per cent of the country’s total non-oil export earnings.

The Government has also allocated G$300 million to the Small Business Development Fund; G$73.2 billion to the health sector, with G$12.4 billion to be spent on developing six new hospitals across the country; G$74.4 billion to improving access to education; and G$29.4 billion towards the energy sector in 2022.

It will provide an additional G$6 billion to support the Guyana Sugar Corporation’s ongoing investment in field and factory operations as it seeks to turn around the industry with the reopening of several estates this year.

Singh pointed out that the budget is fully financed with no new taxes, and in fact there will be tax reductions in a bid to improve business competitiveness, promote local content and support job creation.

According to CDB, the outlook for growth in the Caribbean is underpinned by expectations of accelerated implementation of some large infrastructure projects across the region.

The expected growth, it, however, points out, is subjected to a number of downside risks. These include the emergence of new COVID variants, inflationary pressures, heightened geopolitical tensions, rising interest rates, and natural hazard events.

In 2021, CDB’s borrowing member countries are estimated to have grown by three per cent with commodity exporting economies growing by 2.7 per cent and service exporting economies expanding by 3.2 per cent.

Growth and service exporting economies reflected an almost 10 per cent increase in tourist arrivals between January and September 2021, relative to the corresponding period in 2020 — much of which was recorded during the latter part of the period, as many Caribbean countries benefitted from a recovery in international leisure travel.