Guyana: The tiny country with the world’s fastest-growing economy

Guyana, a small country in South America, is on track to become the fastest-growing economy globally, with an anticipated annual growth rate of 42.8 per cent in 2024, up from 33 per cent the previous year.

This exceptional growth, driven primarily by the oil sector, positions Guyana ahead of many industrialized and emerging economies. In the first half of 2024 alone, the economy expanded by 49.7 per cent, with oil production contributing 67 per cent to this growth.

Located in the northeastern part of South America and bordered by the Atlantic Ocean, Brazil, Venezuela, and Suriname, Guyana is the third-smallest sovereign state by area in mainland South America.

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Despite its small size and population of just 800,000, Guyana’s oil sector has become a significant driver of economic growth, producing approximately 113.5 million barrels of oil in the first half of 2024. The sector is projected to grow by 56.4 per cent for the year.

Guyana’s rapid growth is largely attributed to its massive offshore oil deposits, which have made it the world’s fastest-growing country for two consecutive years. ExxonMobil and its partners Hess and the China National Offshore Oil Company hold the majority stake in these deposits, estimated to contain over 11 billion barrels of oil.

By 2027, Guyana is expected to produce more oil per capita than Saudi Arabia or Kuwait and may surpass Venezuela as South America’s second-largest oil producer after Brazil.

The country’s Natural Resource Fund, projected to exceed $3 billion by the end of 2024, underscores the significant impact of oil revenues on its economy. Since the discovery of oil in 2016, Guyana’s economic landscape has dramatically transformed.

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With GDP growth of 62.3 per cent in 2022, the economy is expected to triple by 2027, driven by oil production that could reach 4,000 barrels per day, potentially raising Guyana’s GDP to $10 billion by 2030.

However, Guyana faces potential challenges associated with its rapid growth, as seen in other oil-rich nations like Venezuela, Angola, and the Congo. Issues such as social conflict, political instability, and the erosion of democratic institutions are common pitfalls that Guyana must navigate to avoid the so-called “resource curse” and ensure its newfound wealth benefits its citizens.

One key initiative to manage this wealth is the construction of Silica City, a new urban centre designed to support technology professionals and other industries. Financed by oil revenues, Silica City aims to attract investment in critical areas such as tourism, food production, industrial development, manufacturing, and biodiversity services.