A new survey from the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC) has projected that Guyana will continue to record the highest economic growth in the Latin America and Caribbean region in 2021 and 2022.
The Economic Survey is an annual publication done by the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC). And, in this year’s report, published recently, it has been projected that Guyana will record a 16 per cent economic growth rate in 2021 while this figure will double in 2022, to 32 per cent.
The economic growth rate projections are made using the country’s real Gross Domestic Product (GDP) which is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy (in this case, Guyana’s economy) in a given year. In simpler terms, the real GDP measures a country’s total economic output, adjusted for price changes.
Importantly, ECLAC’s projections for Guyana illustrate the highest growth figure – for both years – in the entire Latin America and Caribbean region. Generally, this region should see a growth rate of 5.9 per cent for 2021 and 2.9 per cent for 2022.
Guyana’s positive growth is primarily hinged upon developments in its burgeoning oil and gas sector and the associated spin-off works. While many countries have recorded negative economic growth in 2020 because of the pandemic, however, Guyana’s economy was still able to record positive growth- though that was lower than was predicted before the pandemic.
Accompanying Guyana’s economic growth has been efforts to improve social welfare, in light of the devastating impact of COVID-19. As such, the government has made efforts to distribute cash grants to people and reduce or remove taxes; these measures are expected to stimulate the economy- which, in common terms, means that the money will flow in the economy.
Meanwhile, the report highlighted that in 2020, the Latin America and Caribbean region registered the largest economic downturn since 1900 because of the challenges including lockdowns and layoffs of the COVID-19 pandemic. The ECLAC report noted that this was the worst economic performance of any developing region in the world.
Looking ahead, the report cautioned that global economic growth is subject to uncertainties that could have direct effects on growth in Latin America and the Caribbean. The slow roll-out of vaccination worldwide —which could result in further mutations of the virus and the development of more infectious variants— could potentially limit recovery in developing countries such as those in Latin America and the Caribbean.
Additionally, measures employed by individual countries to curb the fallout from the pandemic may have an impact on growth rates.
“These factors would imply greater restrictions in the economies of the region, limiting their recovery capacity,” the report stated.
And, beyond the growth projected for 2021, the report said: “… one of the great challenges for the region is the ability to maintain sustainable and inclusive growth in the coming years.”
ECLAC also suggested that support for micro, small and medium-sized businesses should be crucial components in the strategies to save jobs, stimulate the labour market and increase productivity in economies.