— BoG report details spending pressures, food-price increases and weaker reserves
The Central Government’s deficit nearly tripled to $105.6 billion during the first half of this year, with the Bank of Guyana’s 2026 Half-Year Report showing sharply higher operating costs alongside declining credit to agriculture, manufacturing and mining.
The assessment adds detail to the fiscal deterioration previously reported by Kiskadee Watch from the Ministry of Finance’s Mid-Year Report. The first-half deficit increased from $35.9 billion in 2025, while the projected annual deficit widened from $448.9 billion to approximately $503.8 billion.
The report attributed higher current expenditure to “higher spending on transfer payments, employment costs, purchases of other goods and services, and interest charges.”
Interest costs rose by 52.7% to $13.77 billion. Goods and services spending increased by 22.5% to $107.26 billion, employment costs by 18.8% to $77.83 billion and transfers by 18.2% to $152.10 billion.
Current expenditure grew by 20.7%, against a 0.8% increase in capital spending. Revenue declined by 0.7%, despite stronger tax collections, as Natural Resource Fund transfers fell.
Borrowing and debt
The government’s borrowing requirements have expanded alongside those costs. Kiskadee Watch reported in September that net external borrowing during the first half increased from $19.1 billion to $71.4 billion, while net domestic borrowing rose from $16.8 billion to $34.3 billion.
APNU, responding to the Finance Ministry’s assessment, called for an explanation of the widening financing gap and disclosure of the measurable returns expected from additional borrowing.
Public and publicly guaranteed debt increased by US$830.2 million during January–June to US$8.573 billion. The projected year-end debt stock of US$10.329 billion would represent an increase of approximately one-third over the end-2025 level, Kiskadee Watch reported
The domestic portfolio is heavily dependent on short-term securities. Treasury bills accounted for 84.4% of domestic debt, and the Finance Ministry’s report said the entire domestic portfolio was subject to interest-rate refixing within one year.
First-half debt-service payments amounted to US$145.7 million, comprising US$101.5 million on external obligations and US$44.2 million on domestic debt.
The Finance Ministry has maintained that borrowing remains within prudent cost and risk limits, pointing to a debt-to-GDP ratio of 28.6% at the end of 2025. The International Monetary Fund has assessed Guyana’s debt-distress risk as low, citing rapid growth, concessional borrowing and relatively low debt-service costs.
Writing in Stabroek News in February, former Auditor General Anand Goolsarran had questioned continued borrowing despite petroleum revenues and urged a medium-term framework for spending. He had also challenged the classification of Natural Resource Fund withdrawals as current revenue, arguing that it presented a more favourable operating position and weakened accountability over the use of oil funds.
Uneven lending
Private-sector credit rose by 11.5% to $592.83 billion, but agriculture credit declined by 3.1%, manufacturing by 4.4% and mining by 16.5%. Mortgage and personal lending expanded by 21.2% and 14.5% respectively.
The lending figures provide another measure of the uneven performance outside of petroleum. Earlier reporting on the Finance Ministry’s assessment recorded construction growth of 24.7%, services growth of 7.2% and manufacturing growth of 3%. Agriculture, forestry and fishing contracted by 0.5%, with other crops declining by 6.4% following prolonged rainfall.
APNU subsequently highlighted the reduction in the full-year non-oil growth forecast from 10.8% to 10.2% and the agriculture forecast from 7.6% to 2.9%. It argued that weather-related losses required greater investment in drainage, irrigation and protection against flooding and drought.
Household costs
Vegetable prices increased by 26.8% between December and June, fruit prices by 13.1% and oils and fats by 6.3%.
Those increases sit within the broader 6.7% rise in food prices previously reported by Kiskadee Watch. Overall consumer prices increased by 4.4% over the six months, with vegetables and vegetable products contributing 2.5 percentage points.
President Irfaan Ali nevertheless defended the government’s inflation management, pointing to the 12-month inflation rate of 4% as at June and increases in international fuel prices. The 12-month rate compares June with June last year; the 4.4% measure records the increase since December.
Gross international reserves fell by US$293.9 million to US$1.062 billion, providing approximately one month of import cover.
The decline comes amid persistent difficulties obtaining foreign currency. Ali acknowledged in September that unmet demand in the banking system exceeded US$200 million, with requests carried forward because banks could not satisfy them all.
He projected demand of US$1.575 billion between September 10 and year-end and identified credit-card settlements, profit repatriation and business expansion as sources of pressure.
Such access problems predate the latest report. Stabroek News had reported in July 2025 that visits to four commercial banks found no US-dollar notes available for sale. Bank of Guyana Governor Dr Gobind Ganga maintained then that aggregate holdings showed no overall shortage, but said banks should provide small amounts for legitimate customer needs.
State enterprises
GUYOIL’s deficit widened from $12 million to $3.02 billion. GPL and GuySuCo recorded deficits of $1.97 billion and $897 million respectively.
The government has presented its spending programme as an investment in long-term transformation. And Stabroek News had reported that the $1.558 trillion budget presented in January was 12.7% larger than the previous year’s, with Finance Minister Dr Ashni Singh citing infrastructure investment and continued economic expansion.
The latest figures, however, put renewed attention on the balance between operating costs, borrowing and productive investment. APNU has called for the government to demonstrate how larger budgets and increased debt will translate into stronger productive sectors and better living standards.
Source: Kiskadee Watch
