Guyana’s economic growth strong, supported by prudent policies – IMF – News Room Guyana

See below the full release from the International Monetary Fund: 

Guyana’s economy continues to expand at one of the highest rates in the world, supported by strong oil production and robust, broad-based non-oil activity. Real GDP grew by over 19 percent in 2025, with oil and non-oil GDP increasing by 21 percent and 14 percent, respectively, as oil production exceeded 900,000 barrels per day, labor market conditions strengthened further, and private credit supported economic activity. These trends broadly continued in the first half of 2026. Average inflation remained contained at 3.3 percent in 2025 but edged up in 2026, reflecting higher global energy and food prices. The external position strengthened further, with the current account surplus widening, gross international reserves reaching about US$1.4 billion, and the Natural Resource Fund (NRF) accumulating about US$3.3 billion (over 12 percent of GDP) by end-2025.

Strong oil revenues helped narrow the overall fiscal deficit to 5.5 percent of GDP in 2025 while large public investments continued. The non-oil primary deficit as a share of non-oil GDP also declined slightly. The accumulation of oil revenue in the NRF has helped build external and fiscal buffers, and investments in physical and human capital have supported non-oil growth and social outcomes. Monetary operations have helped contain liquidity and exchange rate pressures, while fiscal and supply-side measures have cushioned near-term price pressures. Economic fundamentals remain strong, while wage and competitiveness indicators warrant continued monitoring.

Executive Board Assessment[2]

Prudent macroeconomic policies continue to support Guyana’s strong growth. The authorities’ development strategy appropriately emphasizes diversification, resilience, and sustainability, while building buffers through continued rapid NRF accumulation and maintaining one of the lowest debt-to-GDP ratios in the Western Hemisphere. Large public investments in physical and human capital are supporting non-oil growth and social outcomes. Monetary operations have helped contain liquidity and exchange rate pressures, while fiscal and supply-side measures have cushioned near-term price pressures. Against this background, available indicators do not point to clear overheating or competitiveness pressures, though strong wage growth and wage-based real exchange rate measures warrant close monitoring.

Guyana’s economy continues to expand at a very rapid pace, supported by robust oil and non-oil activity. Real GDP grew by over 19 percent in 2025, following average growth of nearly 40 percent during 2023–24. Oil production exceeded expectations, while broad-based non-oil growth remained robust, led by construction and supported by agriculture, mining, and manufacturing. Labor market conditions improved, and credit growth remained strong. Inflation remained contained in 2025 but picked up by mid-2026, reflecting higher global energy and food prices. The overall fiscal deficit narrowed by nearly two percentage points to 5.5 percent of GDP in 2025, reflecting strong oil revenue while large public investment continued. Rising oil production and a decline in oil-related service imports strengthened the external position, which is assessed to be broadly in line with the level implied by fundamentals and desirable policies in 2025.

The outlook remains highly favorable amid broadly balanced risks. Oil production is expected to continue expanding, and non-oil growth is projected to average about 7 percent over the medium term. The external and fiscal positions should strengthen as new oil fields come onstream. Amid elevated global uncertainty, upside risks stem from further oil discoveries, stronger construction, and higher oil prices, while downside risks include oil price volatility, overheating pressures, and climate shocks.

The fiscal deficit is expected to widen somewhat in 2026 due to transfers and electricity subsidies before improving in 2027. If oil prices remain persistently high, a larger share of additional revenue should be saved in line with absorptive capacity. Spending should continue to prioritize productivity-enhancing projects and support for the vulnerable, while strengthening spending oversight and the performance of some key public enterprises. Consideration should be given to improving the targeting of subsidies, and broad price-mitigating measures should be gradually replaced with targeted support.

Building on the authorities’ strong commitment to fiscal responsibility, a comprehensive medium- and long-term fiscal strategy would help preserve fiscal sustainability and intergenerational equity. Existing budget frameworks provide a strong basis for further developing medium- and long-term fiscal guideposts. The non-oil primary balance could serve as the main operational target, strengthening gradually over the next decade to a level consistent with a chosen long-run anchor, such as preserving the real per capita value of NRF assets. During the transition, public spending should remain aligned with development needs and absorptive capacity, accounting also for the high cost of public service delivery in a low population density country such as Guyana.

Monetary policy should remain consistent with the stabilized exchange rate arrangement and price stability. Liquidity should be managed through FX operations, as needed, and greater use of treasury bills and reserve requirements, to keep broad money growth broadly aligned with nominal non-oil GDP growth. Additional tightening would be warranted if demand, credit, or exchange rate pressures intensify. Over time, strengthening the monetary framework by activating the interest rate channel, deepening financial markets, improving macroprudential tools, and gradually reducing broad price-mitigating measures would enhance transmission. The current exchange rate regime remains appropriate, while greater flexibility could be considered over the medium term to facilitate macroeconomic adjustment and enhance resilience to shocks.

The banking system remains well capitalized, liquid, and with improving asset quality. Staff welcomes continued vigilance in safeguarding financial stability, including with respect to concentration risks. Developing a comprehensive macroprudential framework would further help safeguard financial stability and enhance policy formulation and implementation. Rapid housing market growth warrants continued close monitoring, supported by developing a real estate price index. Cybersecurity standards should also be enhanced as financial services become increasingly digital.

Staff welcomes ongoing efforts to strengthen public sector transparency, service delivery, and governance. Priorities include resolving outstanding cost-oil audits, improving the timeliness of public enterprise and agency accounts, further strengthening audit capacity, especially in the oil and gas sector, and ensuring consistent compliance with the procurement framework as public spending expands. Efforts to strengthen AML/CFT and anti-corruption frameworks should continue, including by strengthening the Integrity Commission and the asset declaration regime.

Guyana is advancing toward a cleaner and more cost-effective energy mix while remaining at the forefront of market-based forest conservation. The Gas-to-Energy project is expected to reduce reliance on fuel-based power generation, lower energy costs, and support competitiveness. Broader diversification efforts should continue to strengthen human capital, expand employment opportunities, address labor shortages, and improve food security. Strengthening resilience to climate risks, through investments in sea defenses, drainage, and climate-resilient agriculture, remains key.

Staff welcomes continued efforts to strengthen official statistics. Priorities include updating national accounts and price statistics, further strengthening external statistics, maintaining regular labor force surveys, publishing more complete census results, and rolling out a new household budget survey. These improvements are critical to strengthen the evidence base for policymaking and assess the impact of policies. 

Sources: Guyana’s authorities; UNDP Human Development Report; World Bank; and IMF staff calculations and projections.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with its members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff team prepares a report, which forms the basis for discussion by the Executive Board.

[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

Source: NEW ROOMS SITE