Guyana Poised to Post World’s Highest GDP Growth

One of Latin America’s smallest countries could see 100% growth of its gross domestic product by end-2023 compared with two years earlier

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November 11, 2022 | 05:21 PM

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Bloomberg Línea — Guyana, the small South American country with fewer than 800,000 inhabitants, will likely be the fastest growing in the world in terms of GDP.

According to estimates by the World Bank and the International Monetary Fund (IMF), the English-speaking nation bordering Brazil, Venezuela and Suriname could see GDP growth of close to 100% at the end of 2023, compared with end-2021 figures, thanks to the growth expected this year and next.

Guyana has already outpaced global growth averages. In 2020, while the economies of the world collapsed due to the coronavirus outbreak, Guyana’s GDP grew by 43.5%, and in 2021 by 19.9%.

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Guyana’s growth explained

Guyana’s phenomenal growth can be explained by two things: on the one hand, it is a very small economy (with GDP of $7.4 billion), so any boost has a huge impact, and that growth will be boosted by its huge offshore oil discoveries.

The big change came in 2015, when a consortium of oil companies, led by Exxon Mobil (XOM), stumbled across the equivalent of 11 billion barrels of oil and gas offshore, some 190km (118 miles) off the country’s coast.

In 2019, the first extractions were carried out, and from that moment on the good news continued, with Exxon Mobil reporting two finds in the Sailfin-1 and Yarrow-1 wells in the Stabroek block, off the Guyanese coast, in October of that year.

Guyana’s crude reserves account for one-third of global reserves since Exxon made the first find in 2015, according to the consulting firm Rystad Energy. According to estimates by the firm, the government will rake in more than $1 billion this year in oil revenues.

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Growth projections for 2022 and 2023

According to IMF estimates, Guyana will grow 57.8% this year and 25.2% next year, resulting in a GDP increase of around 97.6% in two years. Meanwhile, the World Bank forecasts an increase of 47.9% for 2022 and 34.3% for 2023. This equates to a 98.6% GDP jump over the two-year period.

In comparison, Latin America and the Caribbean will see growth of 3.5% in 2022 and 1.7% in 2023, according to the IMF.