Oil Production & Fund Withdrawals Will Power Guyanese Growth In 2022, 2023

• Fitch Solutions has revised its 2022 and 2023 forecasts for real GDP growth in Guyana to 56.1% and 18.7%. This is from 46.0% and 8.0% previously, as oil production has ramped up more rapidly than initially anticipated which, combined with a higher oil price environment, will sustain more robust growth. 
• Robust demand for energy globally and further development and exploration of offshore reserves will sustain exports and investment in the coming quarters. As such, interest in Guyana’s oil sector will remain strong, attracting continued investment.
• Most notably, fueled by the rapidly expanding oil sector, Fitch also expects the non-oil economy will continue to grow as well. Therefore, in the coming years, greater development of the oil sector will sustain more robust non-oil growth, positioning Guyana as a regional outperformer as additional oil projects come online in the coming years.
• The additional projects will expand the sector’s production capacity and further drive export and investment growth, despite a moderating oil price environment. Greater production will also support the labour market and additional government revenue receipts, sustaining higher spending.
• Importantly, while Fitch’s Oil & Gas team expects that oil prices will fall only modestly in 2023, should the global economy slow more rapidly than anticipated, oil prices could fall more than currently anticipated. This would undermine revenue intake for the government, potentially hindering greater spending plans or the expansion of Guyana's non-oil economy.

(Source: Fitch Solutions)