At a time when the average growth rate across the world is projected to decline sharply to 1.7% this year, Guyana’s economy is expected to grow by 25.2% in 2023, according to the World Bank.
According to the banks’s Global Economic Prospects report, growth in Latin America and the Caribbean is also expected to decline this year before recovering next year.
“The slowdown reflects efforts by monetary authorities to tame inflation, and spillovers from a weak global outlook. Sluggish growth in the United States and China is expected to curtail export demand, while rising U.S. interest rates are likely to keep financial conditions restrictive. Slow global growth is expected to weigh on commodity prices, weakening South America’s terms of trade,” the World Bank explained.
However, notwithstanding these downward trends, Guyana is expected to experience positive growth rates going forward. According to the World Bank’s forecast, this year, Guyana is projected to experience a growth rate of 25.2% followed by 21.2% in 2024 – the highest in the region.
In 2020, Guyana experienced a 43.5% growth rate followed by 20.0% in 2021 and an estimated growth of 57.8% in 2022.
The Work Bank noted that in 2022 inflation surged, reaching multi-decade highs in many countries with price pressures broadening to a wide array of goods and services. Food prices, in particular, rose rapidly.
Meanwhile, Brazil, in 2023, is projected to grow by 0.8% as high interest rates curb investment and export growth slows. Mexico’s economy is also expected to expand, however, by only 0.9% as restrictive monetary conditions, stubbornly high inflation, and softer exports curtail activity.
“GDP in Argentina is forecast to grow 2 percent in 2023, as very high inflation stymies economic activity. After surging last year, growth in Colombia is also set to slow markedly, to 1.3 percent this year. Chile’s economy is likely to contract over the year, as lower real incomes erode consumption. In Peru, elevated policy uncertainty and declining metal prices are expected to dampen growth, forecast at 2.6 percent in 2023,” the World Bank detailed.
It reported too that growth in Central America is forecast to soften to 3.2% in 2023, as deceleration in the U.S. economy hampers exports and inward remittances. The Caribbean, however, is expected to see firmer expansion, at 5.6 percent, but this partly reflects a long-delayed recovery from the pandemic-induced recession, the World Bank said.
Further, the World Bank warned that the situation is so bad that the global economy is “perilously close” to falling into another recession.