Guyana: Staff Concluding Statement of the 2025 Article IV Mission
IMF News, March 7, 2025
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- Published: March 7, 2025
Mission and engagement
- IMF staff team led by Ms. Alina Carare and Ms. Lusine Lusinyan conducted the 2025 Article IV Consultation during February 24–March 7, 2025, meeting virtually and in Georgetown.
- Meetings held with Vice-President Dr. Bharrat Jagdeo, Finance Minister Dr. Ashni Singh, Minister of Parliamentary Affairs and Governance Gail Teixeira, Central Bank Governor Dr. Gobind Ganga, other senior officials, private sector representatives, banks, labor unions, and other stakeholders.
Recent performance and near-term outlook
- Guyana’s economic transformation characterized by rapidly expanding oil production, strong non-oil output, and large-scale public infrastructure investment.
- Recorded average real GDP growth rate of 47 percent in 2022–24 (highest in the world).
- Projected 2025 growth:
- Real GDP: about 10¼ percent in 2025.
- Real non-oil GDP: 13 percent in 2025.
- Inflation:
- Close to 3 percent in end-2024.
- Expected to edge up to around 4 percent by end-2025.
- Fiscal stance and balances:
- Budget deficit narrowed from 7.3 percent of GDP in 2024 to just below 5 percent of GDP in 2025 (as higher oil revenues more than offset projected increase in spending).
- Capital expenditure reached over 12½ percent of GDP in 2024.
- External accounts:
- Current account surplus of 24½ percent of GDP in 2024.
- Projected to moderate to about 9 percent of GDP in 2025 reflecting imports of the fourth oil FPSO vessel.
Medium-term outlook and risks
- Medium-term growth:
- Economy expected to grow on average 14 percent per year over the next five years, driven by robust oil production amid a growing share of the non-oil sector.
- Non-oil GDP projected to expand on average by about 6¾ percent per year.
- Upside risks:
- Further oil discoveries and productivity-enhancing investments, including to strengthen energy resilience.
- Downside risks:
- Overheating pressures potentially causing higher inflation and real exchange rate appreciation beyond levels consistent with a balanced expansion.
- Commodity price volatility and climate shocks could adversely affect inflation and the macroeconomic outlook.
- Assessment: Risks broadly balanced.
Fiscal policy recommendations and framework
- Current fiscal policy stance judged appropriate given development and investment needs; fiscal deficits should gradually close over the medium term.
- Specific recommendations:
- Gradually close the overall fiscal deficit by 2031.
- Narrow the non-oil primary deficit over the (conservatively) projected lifespan of oil reserves to levels consistent with intergenerational equity and fiscal and macroeconomic sustainability.
- Implement a comprehensive medium-term fiscal framework with an explicit anchor and an operational target.
- Further modernize public financial management systems.
- Conduct regular expenditure reviews to assess spending efficiency and effectiveness in reaching the SDGs.
- Natural Resource Fund (NRF):
- Increase in the withdrawal ceiling from the NRF in early 2024 provided room for substantial expansion of capital expenditure.
Monetary policy, liquidity, and exchange rate
- Monetary policy described as appropriately tight and helping contain inflation.
- Policy guidance:
- Maintain broad money growth in line with non-oil GDP growth.
- Carefully manage liquidity in the banking system.
- Tighten monetary policy further if signs of overheating or imbalances emerge.
- Enhance the monetary policy toolkit:
- Strengthen the interest rate channel.
- Reduce excess liquidity where needed.
- Deepen financial markets to strengthen monetary policy transmission.
- Exchange rate regime:
- Current stabilized exchange rate regime remains appropriate.
- A reassessment of the exchange rate framework could be beneficial in the medium term as the economy transforms.
Financial sector and macroprudential stance
- Scope exists to strengthen the macroprudential framework to respond to potential shocks to financial stability.
- Recommendations:
- Link macroprudential framework to real-time supervisory framework.
- Bank of Guyana interest in IMF technical assistance welcomed to develop macroprudential tools.
- Improve data collection and statistics on corporate and household balance sheets and real estate prices to support banking supervision and risk-based financial supervision.
Governance, transparency, and anti-corruption
- Progress made:
- 2023 NRF and Public Accountability and Oversight Committee Annual Reports presented to the National Assembly.
- Regular notifications of petroleum revenue receipts published in the Official Gazette and presented to the National Assembly as mandated by law.
- Bank of Guyana publishes monthly and quarterly reports of the NRF’s financial performance.
- Improvements in revenue administration capacity and procurement framework upgrades, with ongoing work to introduce e-procurement.
- AML/CFT and anti-corruption frameworks:
- Guyana’s CFATF Mutual Evaluation Report (published in 2024) found significant improvement in understanding ML/FT risks, including a 2023 sectoral risk assessment on the Extractive Industries.
- 2024 MESICIC review acknowledges progress; authorities working to strengthen the Integrity Commission and compliance framework for declaration submissions.
- Following the 2024 EITI report, authorities working to implement beneficial ownership transparency recommendation in line with EITI standards.
- Need to strengthen regulatory compliance in the non-oil mining sector, particularly with large-scale operators.
- Internal audit capabilities expanding; more effort needed for timely publication of audit reports of some public companies and local authorities.
- Support for hiring more magistrates and judges to strengthen the rule of law.
Climate, energy, and resilience
- Guyana recognized as a global pioneer in climate policies monetizing forest conservation.
- Authorities advancing actions in line with Guyana’s Low Carbon Development Strategy 2030 to build resilience, promote sustainable forestry, and enhance biodiversity conservation.
- Gas-to-Energy project expected to secure reliable electricity provision countrywide as a transition toward a cleaner and more renewable energy mix over the longer term.
Inclusive growth, labor, and social protection
- Staff assessment: Social transfer policies implemented in recent years have increased disposable income and reduced the poverty rate.
- Recommendations:
- Additional targeted transfers, integrated into a medium-term fiscal framework, could further support inclusive growth and help advance toward the SDG of no poverty.
- Address labor shortages and skill mismatches through training and vocational education to support expansion and increase women’s participation in the labor market.
- Support reforms and investments to boost productivity, trade connectivity, and export diversification, including high value-added products in agriculture and manufacturing.
Statistics, data, and capacity development
- Ongoing efforts to modernize official statistics; IMF offered further support through capacity development.
- Priorities:
- Further enhancements to national accounts and price statistics to capture the rapidly evolving economy.
- Finalize the updated household budget survey by 2027.
- Conduct regular labor force surveys to inform and refine government policies.
Closing remarks
- Staff commends authorities for their commitment to macroeconomic stability, fiscal sustainability, and inclusive growth.
- Recommendation to closely monitor macroeconomic developments and proactively respond with tighter policies if necessary to avoid overheating and preserve a balanced expansion.
- Mission thanks the authorities and counterparts for constructive policy dialogue and cooperation.
IMF staff concluding statement, March 7, 2025.