Guyana, the Caribbean country that borders on South America is set to register the largest economic growth in the world in 2020.
This is according to projections laid out by the International Monetary Fund.
For 2019, the country is expected to grow by 4.4 per cent, while in 2020 it is projected to grow by 85.6 per cent.
The country is also projected to have an economic growth rate of 4.8 per cent, 20.6 per cent, 26.2 per cent and 3.2 per cent for the years 2021 to 2024, respectively.
This, while Trinidad’s 2019 projection is at 0 per cent and in 2020, the economy is set to grow by 1.5 per cent.
For the years 2021 to 2024, T&T is projected to grow at 2.3 per cent, 2 per cent, 1.6 per cent and 1.7 per cent respectively.
The reason for Guyana’s explosive growth rests on its commencement in oil production next month, which also has many anticipating a change economic fortunes of the country.
Based on IMF calculations, the oil sector in the country will represent about 40% of the economy within five years.
Guyana’s $4 billion annual gross domestic product, according to the IMF, will expand to about $15 billion by 2024.
Reports indicate that the government plans to use some of the money derived from its royalties to build highways to connect coastal towns to the sparsely populated interior, which has gold, diamond and bauxite deposits.
However, the organisation has noted that its forecast may be subject to large revisions since even small changes to the projected oil output in 2020 would result in major shifts in the overall economic performance.
Exxon, one of the companies set to develop the new deep-water oil discoveries off the country’s coast, has reported that it will begin pumping from its first oil in December, and by 2025 Guyana will produce at least 750,000 barrels a day.
The government of Guyana expects the initial $300 million a year in revenue from profit-sharing and royalties to more than double after a second offshore well starts production around 2022.
The Guyanese government has indicated that the gains will go directly to a sovereign wealth fund the country established in 2019, which will be used as a savings fund that will continue for generations, to protect against oil price shifts, and to fund development plans.