The IMF produced its annual World Economic Outlook this year titled “Managing Divergent Recoveries”. For the first time we have been given a glimpse as to the true global impact that Covid-19 had across the globe.
The full report can be found below, but here are a few key stats that the Sc3 team was able to pull from it :
Globally the worlds economy shrank by a stunning 3.3%. With Advanced Economies suffering more then Emerging Market and Developing Economies with average growth rates of -4.7% and -2.2% respectively.
When normalized for Market Exchange rates the actual decrease was -3.6%.
Out of over 160 countries that the IMF covered, only 26 of them had positive Real GDP growth in 2021 post Covid-19. Of the 26 Countries with positive real gdp growth only 3 had growth over 5% — Guinea(5.2%), Ethiopia(6.1%), and Guyana (43.4%).
Latam & The Caribbean:
Regionally, Latin America and the Caribbean suffered the hardest with a decrease of -7% as calculated by the World Bank, under review by Sc3 we actually show across the 33 countries identified as Latam & Caribbean the actual growth rate was -8.99%.
When separating out Latin America and the Caribbean(based on Caricom status) we got a -9.4% Growth rate for the Caribbean Region and a -8.55% growth rate for the Latam Region.
Winners and Losers:
Across both regions the absolute winner was without a doubt Guyana, who not only was the fastest growing economy in the region, but also globally at a staggering 43.4% — almost 20% points higher then what the IMF and World Bank forecasted back in October 2020, or rather almost half of the projected growth rate that was estimated by those organizations pre-covid. Its next closest peer for the region was Paraguay with a negative growth rate of -.9%.
The two economies that shrank the most were Venezuela shrinking a jaw-dropping 30% and Aruba whose economy shrank by 25% as a result of Covid-19. These economies are in dire straights and it will be difficult to see how they find their way in a post Covid world.
Guyana’s Impact on the Region
If you have been following Sc3’s analysis and research on Guyana you will keep hearing us reference the critical role Guyana will be playing in the Caribbean and Latin American region on a going forward basis. One of the primary reasons we spent the time to dive into the numbers is we wanted to see exactly how much of an impact Guyana’s growth is having on the region as a whole.
If you were to remove Guyana’s real GDP growth from the entire region and recalculate the 2020 Real GDP Growth with a cohort of 32 countries instead of 33, the region would have experience a -10.63 percent growth rate. To put it another way, Guyana single handedly raised the average GDP Growth of the ENTIRE region by 1.64% points in its first year as an oil producing nation. This is a mind blowing statistic and shows just how quickly Guyana’s impact is being felt across the hemisphere.
As time progresses and the future unfolds, it will be interesting to see how Guyana’s growth continues to effect the entire hemisphere both politically and economically. As of the issuance of this report the IMF believes that Guyana’s 2021 growth rate will be 16.4 percent and that next year when the next FPSO comes online in 2022, it will jump to 46.5 percent.
The Government of Guyana has issued guidance that it believes that this year’s growth rate will be closer to 21%. Sc3 believes that if properly calculated, the growth rate will be closer to 30% in 2021 and 60% in 2022.