Guyana’s economy continues to expand at one of the fastest rates in the world, supported by strong oil production and broad-based growth across the non-oil economy. According to the International Monetary Fund, real GDP increased by more than 19 per cent in 2025, with oil GDP rising by 21 per cent and non-oil activity expanding by 14 per cent.

Oil production exceeded 900,000 barrels per day during the year, while construction, agriculture, mining and manufacturing also contributed to growth. Labour market conditions strengthened and private credit continued to support economic activity, with these trends broadly continuing into the first half of 2026.

The strong expansion has also improved Guyana’s fiscal and external positions. The overall fiscal deficit narrowed to 5.5 per cent of GDP in 2025 as higher oil revenue helped offset weaker non-oil revenues while allowing public investment to remain elevated. At the same time, the Natural Resource Fund accumulated approximately US$3.3 billion by the end of 2025, representing more than 12 per cent of GDP.

Guyana’s external position also strengthened as rising oil production and lower oil-related service imports supported the current account. Gross international reserves reached approximately US$1.4 billion, while the country maintained one of the lowest debt-to-GDP ratios in the Western Hemisphere.

Despite the rapid pace of expansion, inflation remained relatively contained at 3.3 per cent in 2025 before increasing during 2026 as global energy and food prices rose. The IMF noted that available indicators do not yet point to significant overheating or competitiveness pressures, although strong wage growth and real exchange-rate developments warrant continued monitoring.

The medium-term outlook remains highly favourable. Oil production is expected to continue increasing as new fields come onstream, while non-oil growth is projected to average about 7 per cent over the coming years. Stronger oil revenues should further improve the fiscal and external positions, although higher oil prices could also intensify demand and inflationary pressures.

Against this backdrop, the IMF encouraged Guyana to continue strengthening its fiscal framework. Public spending should remain focused on productivity-enhancing infrastructure, human capital and support for vulnerable households, while broad subsidies should gradually become more targeted. Saving a larger share of additional oil revenue would also help preserve fiscal buffers and support future generations.

The Fund also called for continued improvements in monetary policy, financial supervision, governance and economic diversification. Priorities include strengthening the interest-rate channel, deepening financial markets, improving oversight of public enterprises, expanding climate resilience and addressing labour shortages.

The IMF’s assessment suggests that Guyana remains in a strong economic position. However, sustaining that momentum will depend on how effectively the country manages rapid oil-led growth while strengthening institutions, preserving stability and ensuring that development gains are spread across the wider economy.

Source: (IMF)

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