Venezuelan Threats Unlikely To Derail Guyana's 2024 Growth, Barring Military Action

• The recent high tensions between Guyana and Venezuela over the former’s Essequibo region have increased uncertainty for Guyana’s world-leading economic growth outlook.
• In Fitch’s core scenario where Venezuela does not invade Guyana, the short-term economic impact is expected to be modest, though some foreign oil companies could pull back on investment plans, which would hurt output growth in the long term.
• Currently, Fitch expects Guyana will be one of the fastest-growing economies in the world in 2024, following up its 29.5% growth in 2023 with a 23.5% expansion next year. This view is rooted in the forecast for rapid oil production growth. The oil boom is driving an expansion of employment, investment, and exports, while also allowing the government to ramp up public spending.
• In a less-likely scenario where Venezuela does launch an invasion of Essequibo, Guyana’s economy would take a significant hit, as it seems unlikely to be able to hold onto the region – and its massive natural wealth – without help from foreign militaries.
• Following this report, on, December 14, 2023, in Argyle, Saint Vincent and the Grenadines, His Excellency Irfaan Ali, President of the Co-operative Republic of Guyana and His Excellency Nicolas Maduro, President of the Bolivarian Republic of Venezuela held discussions on matters consequential to the territory in dispute between their two countries.
• The countries came to the resolve that, Guyana and Venezuela, directly or indirectly, will not threaten or use force against one another in any circumstances, including those consequential to any existing controversies between the two States.
• Other declarations were made including resolving their current issues by following international law; promoting peaceful coexistence and good neighbourliness; and continuing dialogue on any other pending matters of mutual importance to the two countries

(Sources: Fitch Solutions & The Joint Declaration of Argyle for Dialogue and Peace Between Guyana and Venezuela