DATA from the International Monetary Fund (IMF) suggest the Guyanese economy is set to double its 2022 level in the next four years, due largely to continued strong growth from that country’s oil sector.

The IMF, following its latest Article IV consultation with Guyanese authorities, said it expects that country’s economy to grow at an average rate of 20 per cent per year during the 2024 to 2028 period. At that rate, the country’s gross domestic product (GDP) in 2028 is expected to be twice as large as it was in 2022. Its per capita income is also expected to double over that period, moving from US$18,335 at the end of 2022 to over US$42,000 by 2028. That would put its per capita income on par with wealthy countries like France and ahead of South Korea, Italy and Japan. In 2021, the country’s per capita income was US$9,700.

“Guyana’s very favourable medium-term growth prospects are accompanied by upside risks — key among them being further oil discoveries that would continue to improve growth prospects,” the IMF said in notes outlining its findings after assessing that country’s economy which also indicates where the growth will come from for Guyana.

Guyana’s economy, which has been the fastest growing in the world in recent years, tripled in size between 2020 and 2022. Last year Guyana’s economy grew by 62.3 per cent and is forecast to grow a further 38.4 per cent this year. Most of that growth will come from the oil sector, which the IMF believes will grow by 56.4 per cent during 2023. Non-oil output is expected to grow 9.1 per cent. Guyana’s economy has been the best growing in recent years as the company benefits from an oil bonanza, chiefly in its Essequibo region which Venezuela claims to be part of its territory.

The country is expected to produce US$11.3 billion in oil this year, a 14 per cent increase from 2022. It is projected to produce US$15 billion worth of oil next year. Oil already generates US$1 billion in revenues annually for the Government and will produce an estimated US$7.5 billion by 2040. By these forecasts, Guyana — the impoverished, rainforest-covered country of just 800,000 people — will become the fourth largest offshore oil producer in the world. Sums transferred to the budget from oil production since 2022 is enabling the Government to start investing heavily to address large development needs.

“These very favourable prospects are accompanied by balanced risks. On the upside, further oil discoveries would continue to improve Guyana’s long-term economic prospects and a construction boom would support higher short-term growth than projected. The main downside risks are overheating, leading to inflationary pressures and appreciation of the real exchange rate beyond the level implied by a balanced expansion of the economy,” the IMF said. Other downside risks include highly volatile commodity prices and adverse climate shocks as well as governance concerns, which could negatively impact the economy.

Guyana’s oil reserves per capita are one of the highest in the world. Going forward, oil production will continue to expand rapidly as four new fields will come on stream by end of 2028. Sustained real non-oil GDP growth is also expected, as the Government continues to invest in human capital, lower energy costs, and build infrastructure, including for climate change adaptation. The IMF said Guyana’s key challenges are managing large resource revenue inflows to ensure macroeconomic stability and sustainability, while investing steadily in people, physical infrastructure, and institutions.