March 7, 2025
PRESS OFFICER: Rosa Alejandra Hernandez Gomez
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC:
An International Monetary Fund (IMF) staff team, led by Ms. Alina Carare and Ms. Lusine Lusinyan, held discussions virtually and in Georgetown for the 2025 Article IV Consultation during February 24–March 7, 2025. The team met 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, representatives from the private sector, banks, labor unions, and other stakeholders. At the conclusion of the visit, Ms. Carare and Ms. Lusinyan issued the following statement:
Guyana’s economic transformation is advancing at a strong pace and broadening in scale. Rapidly expanding oil production, strong non-oil output, and large-scale public infrastructure investment supported the highest real GDP growth rate in the world, at a recorded average of 47 percent in 2022–24. The non-oil economy continues to reflect a solid broad-based performance across sectors, especially construction and services. Real GDP and real non-oil GDP are projected to grow by about 10¼ percent and 13 percent in 2025, respectively. Inflation is expected to edge up to around 4 percent by end-2025 from close to 3 percent in end-2024. Following a strong fiscal impulse in 2024, the budget deficit is expected to narrow from 7.3 percent of GDP to just below 5 percent of GDP in 2025, as higher oil revenues more than offset the projected increase in spending. The large current account surplus of 24½ percent of GDP in 2024 is projected to moderate to about 9 percent of GDP in 2025 reflecting the imports of the fourth oil Floating Production Storage and Offloading (FPSO) vessel.
The medium-term economic outlook remains highly favorable with balanced risks. The economy is 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 is projected to expand on average by about 6¾ percent per year. Risks to the outlook are broadly balanced. On the upside, further oil discoveries and productivity-enhancing investments, including to strengthen energy resilience would further bolster Guyana’s economic prospects. Downside risks stem from overheating pressures which, if not contained, could lead to higher inflation and real exchange rate appreciation beyond the level consistent with a balanced expansion of the economy. Commodity price volatility in a highly uncertain global environment and climate shocks could also adversely affect inflation and alter the macroeconomic outlook.
Staff commends the authorities’ continued commitment to maintaining macroeconomic stability, ensuring fiscal sustainability, and fostering inclusive growth. While there are no clear signs of overheating, enhancing the close monitoring of macroeconomic developments and continuing to proactively respond through tighter policies would be essential to ensure that the economy avoids overheating and remains on a balanced expansion path. Staff assesses that social transfer policies implemented in recent years have increased disposable income and reduced the poverty rate. Going forward, additional targeted transfers, integrated into a medium-term fiscal framework, could further support inclusive growth and help Guyana advance faster toward its sustainable development goal (SDG) of no poverty.
Given Guyana’s development and investment needs, the fiscal policy stance is appropriate at this stage, and the fiscal deficits should gradually close over the medium term. The increase in the withdrawal ceiling from the Natural Resource Fund (NRF) in early 2024 provided room for a substantial expansion of capital expenditure, which reached over 12½ percent of GDP in 2024. Staff recommends gradually closing the overall fiscal deficit by 2031, followed by a narrowing of the non-oil primary deficit over the (conservatively) projected lifespan of oil reserves to the levels consistent with ensuring intergenerational equity and preserving fiscal and macroeconomic sustainability. Implementing a comprehensive medium-term fiscal framework with an explicit anchor and an operational target, further modernizing public financial management systems, and conducting regular expenditure reviews to continually assess spending efficiency and effectiveness in reaching the SDGs will also help further strengthen fiscal discipline and transparency.
Monetary policy remains appropriately tight, helping contain inflation. Maintaining broad money growth in line with non-oil GDP growth, continuing to carefully manage liquidity in the banking system, and tightening monetary policy further, if signs of overheating or imbalances emerge, remain key to guarding against inflationary pressures. Enhancing the monetary policy toolkit, including through strengthening the interest rate channel, reducing excess liquidity where needed, and taking steps toward deepening financial markets would help strengthen the effectiveness of monetary policy transmission. Maintaining consistent policies will continue supporting the current stabilized exchange rate regime, which remains appropriate. As Guyana’s economy continues to transform, a reassessment of the exchange rate framework could be beneficial in the medium term.
There is scope to strengthen macroprudential framework to help effectively respond to potential shocks to financial stability. The current macroprudential framework could be enhanced to link it to the real-time supervisory framework, and staff welcomes the Bank of Guyana’s interest to engage with the IMF on technical assistance to develop macroprudential tools. Improving data collection and statistics on corporate and household balance sheets and real estate prices will be critical to support strengthening banking supervision and the move towards broad-based risk-based financial supervision.
The authorities have advanced in enhancing governance of the NRF and modernizing public sector operations. The 2023 NRF and Public Accountability and Oversight Committee Annual Reports have been presented to the National Assembly, regular notifications of receipts of petroleum revenues, as mandated by law, are published in the Official Gazette and presented to the National Assembly, and the Bank of Guyana publishes monthly and quarterly reports of the NRF’s financial performance. The authorities have also made good progress in modernizing their revenue administration capacity. The procurement framework is being upgraded, improving public access to information about procurement opportunities and processes and building capacity among public officials. As part of broader digitalization efforts in public sector service delivery, work is ongoing to introduce e-procurement.
Staff supports Guyana’s continued efforts to strengthen its AML/CFT and anti-corruption frameworks in line with its international commitments. Guyana’s Mutual Evaluation Report by the Caribbean Financial Action Task Force (CFATF), published in 2024, found a significant improvement in Guyana’s efforts to improve its understanding of ML/FT risks via the conduct of multiple ML/FT risk assessments, including a 2023 sectoral risk assessment on the Extractive Industries. The 2024 Sixth Round of Review of the Mechanism for Follow-up on the Implementation of the Inter-American Convention against Corruption (MESICIC) from the Organization of American States also acknowledges Guyana’s progress, and the authorities are working to strengthen the Integrity Commission, particularly the compliance framework for the submission of declarations.
Continued implementation of reforms will further strengthen fiscal transparency and anti-corruption frameworks, including in extractive industries. Internal audit capabilities are expanding, and more effort is needed to ensure a timely publication of audit reports of some public companies and local authorities. In line with the recommendations of the MESICIC 2024 report, work is ongoing in multiple areas to strengthen anti-corruption efforts. Following the Extractive Industries Transparency Initiative (EITI) report published in 2024, the authorities are working to implement the beneficial ownership transparency recommendation in line with the EITI standards. There is also scope to strengthen regulatory compliance in the non-oil mining sector, particularly with large-scale operators. Staff supports the authorities’ strong efforts to strengthen the rule of law through hiring more magistrates and judges.
Guyana remains a global pioneer in climate policies monetizing forest conservation, and the authorities are enhancing the country’s energy matrix, strengthening macroeconomic resilience. Against climate change vulnerabilities stemming from sea level rise and flooding, the authorities are working to prioritize actions as outlined in the Guyana’s Low Carbon Development Strategy 2030 to build resilience, further promote sustainable forestry, and enhance biodiversity conservation. The Gas-to-Energy project is expected to secure reliable electricity provision countrywide as a transition toward a cleaner and more renewable energy mix over the longer term.
Staff supports the authorities’ efforts to foster inclusive growth, economic diversification, and upgrading of labor skills. Addressing labor shortages and skill mismatches through training and vocational education is key to supporting the ongoing economic expansion and increasing women participation in the labor markets. Staff commends the authorities for reforms and investments to boost productivity, trade connectivity, and export diversification, including through high value-added products in agriculture and manufacturing.
Staff welcomes the authorities’ ongoing efforts to modernize official statistics and offered further support through capacity development. In this context, further enhancements to the national accounts and price statistics to capture the rapidly evolving economy remain a key priority. The updated household budget survey, planned to be finalized by 2027, and regular labor force surveys will also help shape and refine government policies.
The mission would like to thank the authorities of Guyana and all other counterparts for the constructive and candid policy dialogue, productive collaboration, and warm hospitality.
