Guyana staves off adverse external conditions to record 49.7 percent economic growth in the first half of 2024, 12.6 percent growth in non-oil economy – Finance Minister says

–as Mid-Year Report highlights consistent success based on Government’s policies and programmes

Despite persistent repercussions of the global polycrisis- lingering public health challenges, the ever-present realities of climate change and exposure to natural disasters, and the domestic pass through of global economic realities and policies-which continued to weigh on the economic landscape within which Guyana operates, the country’s economy continues to record strong growth. This was highlighted today by Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr. Ashni Singh, as he alluded to Guyana’s 2024 Mid-Year Report. The Report shows that at the end of the first half of the year, it is estimated that Guyana’s overall economy grew by 49.7 percent and the non-oil economy by an estimated 12.6 percent, representing the fourth successive year of expansion in the non-oil economy at the half-year, following the contraction in 2020. The revised full-year forecast for real GDP growth in 2024 is now 42.3 percent overall and 11.8 percent for non-oil real GDP.  

This growth in the economy, Dr. Singh reiterated, has occurred even as Guyana continues to grapple with external challenges, including continued disruptions to production and supply chains, renewed escalation in freight costs, and interest rate uncertainty given persistent global inflationary pressures, all of which are exacerbated by conflict and geopolitical tension. The continued economic growth is yet another achievement for the People’s Progressive Party/Civic (PPP/C) Government as concurrently, this month the party is celebrating four years since its return to office in August 2020 showing it has maintained an excellent track record in terms of stewardship of the economy.

Over the last four years, strong, resilient, broad-based economic growth was consistently witnessed as the Government maintained its aggressive efforts and was unwavering in implementing its policies and programmes. Since returning to office in August 2020, Government’s goal has been not only to modernize the country through massive infrastructural projects, such as road networks and the bridging of communities and regions, but to also further improve and provide world class social services to citizens and enhance the life of every citizen in every home, providing opportunities for them to grow and prosper, as well as accumulate wealth. The 2024 Mid-Year Report underscores the Government’s outstanding economic performance achieved in the first half of the year, while highlighting many of the challenges faced and risks to successful implementation of the policies, programmes and projects outlined in Budget 2024.   

Dr. Singh, while reflecting on his 2024 Budget presentation under the theme ‘Staying the Course: Building Prosperity for All’, reiterated that it ‘maintained our government’s unwavering focus on improving the lives of every single Guyanese family, and it articulated in considerable detail how this objective is being pursued and, indeed, is being realised on a daily basis’.

“The Budget reiterated our aim that every Guyanese family must be in a position to meet certain basic needs viewed from a comprehensive multi-dimensional perspective. In particular, the Budget emphasized the importance of every family having access to: decent housing including the potential to own their own home; sufficient nutritious food to experience zero hunger; good quality healthcare from conception to old age; relevant educational and skills training opportunities to equip those of employable age for the world of work; potable water and sanitation; and recreational facilities to support healthy living for people of all ages. Significantly, Budget 2024 also highlighted the relevance of these necessities not only for current comfort but also for long term economic empowerment.”

The key macroeconomic highlights in the Mid-Year Report for 2024 are as follows:

ECONOMIC GROWTH

• Overall real GDP grew by an estimated 49.7 percent in the first half of 2024.
• The non-oil economy grew by an estimated 12.6 percent in the first half of the year, representing the fourth successive year of expansion in the non-oil economy at the half-year, following the contraction in 2020.
• The revised full-year forecast for real GDP growth in 2024 is now 42.3 percent overall and 11.8 percent for non-oil real GDP.

SECTORAL PERFORMANCE

Agriculture, Forestry and Fishing

The agriculture, forestry and fishing industries expanded by an estimated 8.7 percent in the first half of the year:

• The rice industry grew by an estimated 17.9 percent in the first half of the year and is now expected to grow by 8.9 percent for the entire year.
• The other crops subsector is estimated to have grown by 8.8 percent in the first half, with a revised growth projection of 12.7 percent for the entire year.
• The forestry industry is estimated to have grown by 13.2 percent in the first half, and growth is expected to remain unchanged at 3.9 percent for the year.
• The fishing industry is estimated to have expanded by 27.7 percent in the first half and is expected to grow by 16.8 percent for the entire year.

Extractive Industries

The mining and quarrying sector is estimated to have grown by 64.3 percent in the first half of the year, driven by growth in the petroleum and “other mining” industries.

• The petroleum subsector grew by 67.1 percent, with 113.5 million barrels of oil produced in the first six months of this year. The industry is now projected to grow by 56.4 percent for the entire year.
• The other mining and quarrying industry comprising sand, stone, diamonds and manganese, is estimated to have grown by 45.5 percent in the first half, driven by greater activity in the construction sector. This industry is now projected to grow by 24.7 percent in 2024.

Manufacturing, Services and Construction

• The manufacturing sector is estimated to have grown by 27.5 percent in the first half, largely driven by increases in “other manufacturing” and rice manufacturing. The sector is now projected to grow by 14.5 percent this year.
• The services sector is estimated to have expanded by 7.3 percent, driven largely by growth in financial and insurance activities and professional, scientific and technical services. The overall 2024 growth rate for services is now 7.7 percent.
• The construction sector is estimated to have grown by 43.7 percent in the first half of 2024 and continues to be driven by both the Public Sector Investment Programme (PSIP) and intensified private investments. The sector is now expected to grow by 27.2 percent in 2024.

BALANCE OF PAYMENTS

The current account recorded a surplus of US$3,199.9 million, while the capital account registered a deficit of US$3,395.4 million. As a result, the overall balance of payments recorded a deficit of US$184.6 million at the end of the first half of 2024.

Total export earnings grew by 68.7 percent to US$10,221.9 million at the end of June 2024, largely on account of higher earnings from crude oil exports, which amounted to US$9,401.6 million in the first half. Non-oil export earnings increased by 23.4 percent in the first half of this year. Earnings from rice and gold expanded by US$24.7 million, and US$12.2 million, respectively, with the latter reflecting favourable price developments.

Total import payments declined over the review period to US$3,245.1 million, largely attributed to the reduction in the importation of capital goods, as no new FPSO was imported.

MONETARY DEVELOPMENTS

Domestic Credit

At the end of the first half of 2024, net domestic credit stood at $773.1 billion, 20.3 percent higher than the level at end of 2023. Total credit to the private sector grew by 9 percent from $376.1 billion at the end of December 2023, to $410 billion at the end of June 2024.

Credit to households rose by 6.8 percent to $41 billion, with notable growth of 11.6 percent observed in lending for motor cars.

Within credit to business enterprises, there was notable growth in lending for services, agriculture, and mining and quarrying, of 11.5 percent, 12.3 percent, and 29.3 percent to $148.5 billion, $24.6 billion, and $6.9 billion, respectively.

Real estate mortgages expanded by 9 percent to $140.2 billion, driven by increases in mortgages granted for private dwellings and industrial and commercial properties.

Inflation

During the first half of 2024, food prices continued to be impacted by a combination of domestic and global factors. These included disruptions in domestic supply chains and increased demand spurred by economic growth and population dynamics. Climate conditions also contributed to challenges in food production and distribution.

The Mid-Year Report documents the numerous initiatives by the Government to raise disposable incomes of citizens and contain the pass through of imported inflation to domestic cost of living including:     

• The 2024 Budgetary commitment of over $70 billion to sustain efforts to increase the disposable income available to citizens while ensuring their improved standard of living.
• Maintaining the zero percent excise tax on petroleum products
• Extending freight charge reductions
• Continuance of the part-time job programme

Consumer prices rose by 1.6 percent at the end of June, 2024 when compared with the end-2023 position, reflecting higher food prices, specifically fruits and fruit products, vegetables and vegetable products and cereals and cereal products. The 12-month inflation rate stood at 4 percent at the end of June and is now projected to be 3.2 percent for 2024.

The Report highlights that across every single sector of government activity, implementation has moved apace including the buildout of Government’s aggressive investment in energy and transport infrastructure and in social infrastructure, such as hospitals and schools; the further rollout of its housing and water programme, which is already well on its way to achieving the targets set at the start of the term of office; rapid expansion of technical and vocational training to ensure that as many Guyanese as possible are equipped with the skills to take up the jobs of today and tomorrow; and the upgrading of institutions and capabilities in the public safety and security sector.

“These and other initiatives, along with our strong policy stance in relation to attracting and stimulating private investment, have resulted in the economy continuing to achieve extraordinary rates of real economic growth. This, in turn, means more economic opportunities for all Guyanese,” he further said, positing that ‘As we navigate the second half of 2024, our government remains firmly focused on ensuring the full implementation of Budget 2024, with the constant aim of improving the lives of every single Guyanese family and every single Guyanese person,” the Senior Finance Minister further noted.   

To view the entire Mid-Year Report 2024, click here: https://finance.gov.gy/wp-content/uploads/2024/08/Mid-Year-Report-2024.pdf