Rising Oil Production To Underpin Large Current Account Surplus In Guyana

• After decades of consistent deficits, Fitch expects Guyana's current account balance will maintain a wide surplus over the coming years, underpinned by strong growth in oil exports.
• Fitch estimated that the current account surplus reached 30.6% of GDP in 2022 (from a deficit of 28.9% of GDP in 2021) as the start of production at ExxonMobil’s second offshore operation in the Stabroek block in February 2022 drove a 159.4% increase in goods exports.
• The current account surplus will narrow to 24.9% of GDP in 2023 as oil-related capital investment, rising government spending and stronger household purchasing power fuel robust import growth.
• Nonetheless, with several new offshore projects due to come online, fueling greater oil exports, Fitch expects Guyana will post a wide current account surplus averaging 26.7% of GDP over 2023-2027.
• Additionally, the country’s capital account will remain in deficit over the coming years (the capital account flipped from a surplus of US$2.1Bn in 2021 to a deficit of US$3.7Bn in 2022) as oil companies recover costs, but healthy foreign direct investment (FDI) inflows and growing international reserves should minimise risk to Guyana’s external account stability over the coming years. 

(Source: Fitch Solutions)