IMF urges caution as economic growth in oil-rich Guyana approaches 60%

IMF urges caution as economic growth in oil-rich Guyana approaches 60%

(Reuters) – Economic growth in Guyana could reach nearly 60 percent this year, the International Monetary Fund said in a statement on Tuesday, urging cautious policies even as the small South American country benefits from increased oil production.

“The growth rate of real gross domestic product is expected to reach 57.8% in 2022,” the International Monetary Fund said in a statement after the bilateral talks, predicting that oil production will double this year and will continue to grow at a rate of 30% annually until 2026. .

Earlier in September, the government of Guyana forecast 2022 growth of 56% overall and non-oil growth of 9.6%.

Oil discovery by ExxonMobil (NYSE:: A consortium led by a company off the coast of Guyana in 2015 turned this tiny Caribbean country into an emerging oil powerhouse with an estimated 11 billion barrels of recoverable oil discovered to date, which the International Monetary Fund says is one of the highest levels per capita worldwide the scientist .

Guyana exports its oil largely to Europe, as the region searches for alternatives to Russian crude, and expects to earn about $1.25 billion this year from the sale of its oil share and proceeds.

The International Monetary Fund said that while its managers agreed that higher oil production could help meet development needs and protect the economy, it also faced risks from oil price volatility, a global economic slowdown and potential difficulties in managing the resource.

Its directors highlighted “the need for continued prudent policy and structural reforms, aided by technical assistance from the Fund”.

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The International Monetary Fund welcomed Guyana’s “restraint” and prudent management of high oil revenues and advised the country to develop its financial and foreign exchange markets as production increases, indicating the possibility of a final review of its monetary policy to allow for a more flexible exchange rate.

IMF directors called on Guyana to continue to “moderately increase public investment” by ensuring that its non-oil gross annual fiscal balance does not exceed projected oil transfers.

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