–non-oil economy experienced 8.3 per cent growth in first half of the year

GUYANA recorded an overall real Gross Domestic Product (GDP) growth of 36.4 per cent in the first half of the year, with the non-oil economy growing by 8.3 per cent, reflecting the government’s supportive policy stance.
This is according to the Ministry of Finance’s Mid-Year Report 2022.

The outlook for the second half of the year continues to be favourable, the report said, pointing out that for the full year, real GDP growth in 2022 is now projected at 56 per cent overall, and non-oil GDP growth at 9.6 per cent, maintaining Guyana’s position of global leader in economic growth.

“Led by President Ali, and fueled by the rapid economic growth, we have embarked on a period of rapid transformation, and our Government has laid out a masterplan for the rapid development and transformation of Guyana. More importantly, we have demonstrated the capacity and commitment to working assiduously to make this vision a reality, so that benefits can redound to citizens in the shortest possible time,” Senior Finance Minister Dr. Ashni Singh is quoted as saying in the report.

Dr. Singh had noted that upon the assumption of office by the President Irfaan Ali-led Government, the administration recognised the importance of a strong, diversified economic base, and, as such, even in the early days of oil production, placed the highest level of importance on a resilient non-oil economy.

The aim, therefore, was to modernise the economy’s traditional pillars, and catalyse ‘a rapidly growing and highly competitive non-oil economy,’ a release from the Ministry of Finance said, pointing out that this is evident in the nation’s non-oil economic growth at the end of the first half.
The continued growth projected for 2022 builds on the 4.6 per cent growth recorded last year.

SECTORAL PERFORMANCE ACCORDING TO THE REPORT
AGRICULTURE, FORESTRY AND FISHING
The agriculture, forestry and fishing sector is estimated to have expanded by 10.9 per cent in the first six months of 2022, driven by higher output from the other crops, forestry and livestock, notwithstanding weaker performances in the sugar, rice and fishing industries. The sector is now expected to grow by 11.9 per cent.

EXTRACTIVE INDUSTRIES
The mining and quarrying sector is estimated to have grown by 64.6 per cent in the first half of the year, with a revised 2022 forecast of 99.9 per cent driven by growth in the petroleum and other mining industries. The petroleum sector expanded by an estimated 73.5 per cent, with 34.6 million barrels of oil produced in the first half of the year. This was as a result of the commencement of oil production at the Liza Unity FPSO in February. Also, on the upside, the bauxite industry is estimated to have grown by 31.9 per cent, and the other mining and quarrying (sand, stone, diamonds, manganese) industries by 36.3 per cent in the first half of 2022.

MANUFACTURING, SERVICES AND CONSTRUCTION
The service industries are estimated to have expanded by 7.6 per cent, driven largely by increases in wholesale and retail trade, and transport and storage. The overall 2022 growth rate for the services sector is now forecasted to be 6.3 per cent. And while the manufacturing sector is estimated to have contracted by 11.4 per cent in the first half of the year, it is now projected to grow by 7.5 per cent for 2022. The construction sector is estimated to have grown by a strong 20.4 per cent in the first half of 2022, reflecting intensified activity in both the public and private sectors.

BALANCE OF PAYMENTS
The overall balance of payments recorded a US$100 million deficit at the end of the first half of 2022, reflecting primarily higher cost of fuel and capital imports. With respect to trade, export receipts expanded by US$2,330.2 million, outweighing the US$506.6 million increase in imports. Notably, these receipts grew largely as a result of higher export earnings from oil, while at the same time, non-oil export earnings increased marginally by two per cent.

MONETARY DEVELOPMENTS
Consistent with the expansion in the non-oil productive sector, credit to the private sector rose by 7.5 per cent to $308.3 billion. This primarily reflects expanding credit to the services sector, manufacturing sector, for real estate mortgage loans, and to households. These increased by 8.2 per cent, 26.7 per cent, 3.2 per cent, and 5.1 per cent, to $110.3 billion, $34.2 billion, $98.6 billion, and $38.5 billion, respectively, the release noted.

PRICES
The Russian invasion of Ukraine has exacerbated supply disruptions to commodity markets, resulting in surging commodity prices, the effects of which are being felt globally. Guyana has not been spared. Consumer prices were 4.9 per cent higher than levels recorded at the end of 2021, and this was due largely to higher food and energy prices.
“Recognising the consequences of these inflationary pressures, Government implemented a suite of measures to ease the burden on the population. The excise tax on petroleum was reduced from 20 per cent to 10 per cent at the time of Budget 2022 presentation, and reduced even further from 10 per cent to zero in March. Additionally, Government also utilised $1 billion for the purchase and distribution of fertiliser to farmers across the country, $800 million to provide cash grants to households in hinterland and riverine communities, among a number of other interventions. Given the existing geopolitical tensions globally, inflation is now projected to be 5.8 per cent for 2022,” the release said.

NATURAL RESOURCE FUND
During the first six months of the year, Government had five lifts of profit oil from the two producing FPSOs. Further, Government received US$307 million in revenue from their share of profit oil, along with royalties to the tune of US$37.1 million in the first half. The cumulative balance on the NRF, inclusive of interest income, was US$753.3 million after withdrawing US$200 million in May.

Government anticipates 13 lifts of profit oil for 2022, and subject to the evolution of world market oil prices, now projects US$1.1 billion from the sale of the country’s share of profit oil, and US$147.7 million in royalties, the release said.

“In just over 24 months of this Government’s current term in office, implemented policies and programmes have already laid a solid foundation for realising the commitments made in the 2020 Manifesto, on the basis of which this Government was elected to office. Government remains steadfast in its efforts to continue to grow the economy, and improve the well-being of all Guyanese, thereby building a modern and prosperous One Guyana,” the release from the Ministry of Finance noted.