IMF commends Guyana’s massive economic transformation

Guyana is currently undergoing a significant economic shift due to its non-oil productivity, the rapidly growing oil production and other robust, fiscal policies.

This was underscored by the International Monetary Fund (IMF) in its Staff Concluding Statement of the 2025 Article IV Mission.

The IMF reported that Guyana recorded the highest real gross domestic product (GDP) growth rate in the world, recording an average of 47 per cent from 2022 to 2024. The non-oil economy is still showing strong overall performance, particularly in the construction and service industries.

It also noted that real GDP and real non-oil GDP are projected to increase by about 10¼ per cent and 13 per cent in 2025, respectively.

As increasing oil revenues more than account for the anticipated increase in expenditure, the per cent deficit is predicted to per cent from 7.3 per cent of GDP to slightly under 5 per cent of GDP in 2025, following a robust fiscal impetus in 2024.

Due to the imports of the fourth oil Floating Production Storage and Offloading (FPSO) vessel, the significant current account surplus of 24.5 per cent of GDP last year is expected to decrease to roughly 9 per cent of GDP this year.

Guyana’s medium-term economic prognosis, according to the IMF, is still quite positive with balanced risks.

Over the next five years, the IMF stated that the economy is predicted to grow by an average of 14 per cent annually, propelled by strong oil output and a rising non-oil sector share.

It went on to explain that the non-oil GDP is projected to expand on average by about 6¾ per cent per year

Guyana’s economic prospects would be significantly strengthened by additional oil discoveries and investments that increase productivity, particularly bolstering energy resilience.

It also commended the country’s continued commitment to maintaining macroeconomic stability, ensuring fiscal sustainability, and fostering inclusive growth.

The IMF emphasised how the recent social transfer initiatives have increased disposable income and lowered the poverty rate. In the future, more targeted transfers combined with a medium-term fiscal framework might promote inclusive growth even more and hasten Guyana’s progress toward the Sustainable Development Goal (SDG) of ending poverty.

While there are no apparent signs of overheating, strengthening the close monitoring of macroeconomic trends and continuing to proactively respond through tighter measures would be vital to ensure that the economy avoids overheating while remaining on a balanced expansion trajectory.

The IMF stated that the fiscal policy stance is adequate at this time and that the fiscal deficits should gradually close over the medium term, given Guyana’s investment and development needs.

Early in 2024, the Natural Resource Fund (NRF) withdrawal ceiling was increased, creating space for a significant increase in capital expenditure, which in 2024 accounted for more than 12.5 per cent of GDP. To ensure intergenerational equity and maintain fiscal and macroeconomic sustainability, it was suggested that the overall fiscal deficit be gradually closed by 2031, followed by a reduction in the non-oil primary deficit over the (conservatively) projected lifespan of oil reserves.

It noted that the implementation of a comprehensive medium-term fiscal framework with an explicit anchor and an operational target will aid in the modernisation of the public financial management systems. Additionally, regular expenditure reviews can be done to continually assess spending efficiency and effectiveness in reaching the SDGs. This will help to further strengthen fiscal discipline and transparency.

The IMF also praised Guyana’s ongoing efforts to foster inclusive growth, economic diversification, and upgrading of labour skills.

It also emphasised Guyana’s investments and reforms to increase export diversification, trade connectedness, and productivity, notably through high-value industrial and agricultural products.