Non-oil sectors performing better than expected – IDB

The Inter-American Development Bank (IDB) says Guyana is on a trajectory of significant economic growth, with notable advancements in the non-oil sectors.

In its recent report, titled ‘Headwinds facing the Post-Pandemic Recovery’, the financial agency said even though the oil sector accounts for a marginal portion of the country’s economic development, it also facilitates massive recovery in the non-oil sectors, exceeding the expectations projected in the 2022 budget.

The statement notes that Guyana’s volume of exported goods is set to increase by 50 per cent annually from 2022-2026.

In April 2022, the IMF estimated a 22.5 per cent growth in this aspect.

The resulting growth in Gross Domestic Product (GDP) is also set to promote further expansion and development in the non-oil sectors. The main drivers of this growth in the non-oil sectors are attributed to the agriculture, services, and construction sectors.

Meanwhile, it states, “Guyana rapidly moved from being a net importer of agricultural products and mineral fuels to being a net exporter of the same commodities, with a trade surplus of 16 per cent of GDP in 2020 and 31 per cent in 2021 with the rest of the world.”

With further expansion of oil production, these trends in trade surpluses are likely to continue.

The report also mentions the policies implemented in response to many of the challenges the country is facing, even in light of the GDP growth. To ensure this growth is not solely dependent on the oil and gas market, the government has expended heavily to ensure the diversification of the economy.

First, it makes note of the added reinforcements to the Natural Resources Fund (NRF), as well as the Vision 25 by 2025 policy initiative. This initiative seeks to reduce extra CARICOM food imports by 25 per cent by 2025.

Moreover, the report makes note of the government’s efforts to foster technological advancements in the field of agriculture to promote further expansion and development in the sector.

In December 2022, the Agriculture Ministry signed an MoU with KARLICO, an Israeli company, for the development of a massive hydroponic production system project in Guyana. Such a system would provide a more environmentally friendly and efficient avenue for agricultural production.