Dear Editor,
One reads in the second paragraph of the Bank of Guyana’s Half Year Report 2024, “The Guyanese economy buoyancy continued with a real oil GDP growth of 49.7 percent and non-oil GDP growth of 12.6 percent” (p. 5). In the previous paragraph, the same report states: “Guyana was able to achieve high economic growth of 49.7 percent in the first half of the year. This high level of growth is estimated to be sustained in the second half. This outturn is expected on account of higher output of crude oil, coupled with improved performance within the non-oil sectors” (p. 5). There is some confusion between the first and second paragraphs with the first implying that the economy (oil + non-oil) grew by 49.7 percent while the second suggests that it was oil GDP that expanded by 49.7 percent (note: real growth = nominal growth discounted for economy wide inflation, which is not the same as inflation gauged by the CPI).
Confusion aside, the half-year report is clear that it is referring to growth in the first six months of the year. What is not clear is the base from which growth is gauged. Is it growth from the end of the previous year to the first half of the next year (December 2023 to June 2024) or is it growth from some other period? The logic and language of the report dictate that it is growth from the end of the previous year (2023) to end first half of the current year (2024). It would be nonsensical for the comparison to span any other period.
Let’s take it that real oil GDP grew by 49.7 percent and real non-oil GDP by 12.6 percent during the first half of 2024 compared to the end of the previous year and do the arithmetic. The result is presented in the accompanying table (see the row “2024Q2”).
If the oil and non-oil economy grew at the rate stated by the BoG, then Guyana’s total GDP (the sum of the two) expanded from G$3.91 trillion at the end of 2023 to G$5.39 trillion at the end of June 2024. That’s an increase of 38.0 percent during the first six months of this year. The problem is that the BoG’s report states that both the oil and non-oil economies are expected to grow in real terms just as rapidly in the second half of 2024 as in the first half (vide quoted passage in the first paragraph of this letter). Let’s do another round of the arithmetic for the second half of 2024 to see what that statement means (see the row “2024Q4”).
As can be seen from the table, total GDP would be G$7.55 trillion at the end of this year, which represents a growth of 93.30 percent. In other words, given what the BoG has written in its 2024 half-year report, the Guyana economy would almost double its size from the end of 2023 to the end of 2024! I do not think any other economy in the world performed such a remarkable feat, doubling in a single year. But when it comes to Guyana, the IMF begs to differ: it projects that the Guyana the economy will expand by 33.9 percent in 2024.
There’s another curious fact about the BoGs’ half-year reports, the 2024 one as well as previous ones. These reports contain data on real growth rates of the oil and non-oil economies but not of the total economy, which is the sum of the two economies (oil + non-oil). Even more surprising, these reports do not have a table of GDP for the first half of the year even though the BoG (or the BoS or both) are able to calculate growth rates that are set in stone and never change (another first for Guyana’s master statisticians). Without the GDP table, one is left to wonder how growth rates have been computed; the sectoral dollar amounts, in real terms, are necessary for the growth exercise.
Editor, it is possible that I am mis-reading what is written in the half-year report, but the language seems clear: the reference is to growth at the end of June 2024 from December 2023 and continued rapid growth for the second half of 2024. The same slippery language is present in previous half-year reports. With the abundance of genius and wizardry domiciled with the borders of Guyana, one wonders why the language of the BoG reports cannot be clearer for lesser beings like this letter writer. Perhaps the BoG and the BoS have discovered another form of prognosis when it comes to the Guyana economy or is it merely duplicitous language to buoy up the optimism of the unwary reader? Whatever the reason, the half-year reports raise issues of ethics, data, language and trust. At the very least, these deficits raise concerns about the preparedness of the government to manage the fastest growing economy in the world.
Yours truly,
Ramesh Gampat