The International Monetary Fund has said Guyana's economy continues to expand at one of the fastest rates in the world, driven by strong oil production and wide-ranging non-oil activity. In its latest Article IV assessment, the Fund's Executive Board concluded that prudent macroeconomic policies have supported the growth.

Real GDP rose by 19.3 per cent in 2025, following average growth of nearly 40 per cent across 2023 and 2024. Oil GDP increased by 21 per cent and non-oil GDP by 14 per cent, as production passed 900,000 barrels per day. Construction led the non-oil sector, with agriculture, mining and manufacturing also contributing. The Fund projects growth of 22.3 per cent in 2026 and expects non-oil growth to average about 7 per cent over the medium term.

Prices have started to rise. Average inflation was 3.3 per cent in 2025 and is projected at 4.1 per cent this year, reflecting higher global energy and food costs. The Fund said available indicators do not point to clear overheating or competitiveness pressures. Strong wage growth and wage-based real exchange rate measures, however, warrant close monitoring.

The public finances improved last year. The overall fiscal deficit narrowed by nearly two percentage points to 5.5 per cent of GDP, helped by oil revenue, even as large public investment continued. The Fund expects the deficit to widen to 6.4 per cent in 2026 because of transfers and electricity subsidies, before improving in 2027. Total public sector gross debt stood at 28.9 per cent of GDP in 2025 and is projected at 27.5 per cent this year, which the Fund describes as among the lowest ratios in the Western Hemisphere.

The external position strengthened. The current account surplus reached US5.7billionin2025,equalto21.4percentofGDP,andisprojectedtorisetoUS10.6 billion in 2026. Gross international reserves were about US1.4billionattheendof2025.TheNaturalResourceFundheldaboutUS3.3 billion by then, more than 12 per cent of GDP.

On fiscal policy, the Fund said that if oil prices remain persistently high, a larger share of the extra revenue should be saved in line with the economy's capacity to absorb spending. It urged better targeting of subsidies and a gradual replacement of broad price-mitigating measures with support aimed at vulnerable households. It also recommended a medium- and long-term fiscal strategy. Under that approach, the non-oil primary balance would serve as the main operational target and strengthen over the next decade towards a long-run anchor, such as preserving the real per capita value of Natural Resource Fund assets. The Fund acknowledged that delivering public services costs more in a country with low population density.

Monetary policy should stay consistent with the stabilised exchange rate arrangement, according to the assessment. Liquidity should be managed through foreign exchange operations, greater use of treasury bills and reserve requirements, and additional tightening would be warranted if demand, credit or exchange rate pressures intensify. The current exchange rate regime remains appropriate, though the Fund said greater flexibility could be considered over the medium term.

Banks remain well capitalised and liquid, with improving asset quality. The Fund called for a comprehensive macroprudential framework, closer monitoring of rapid housing market growth through a real estate price index, and higher cybersecurity standards as financial services become more digital.

Governance featured among the priorities. The Fund asked for outstanding cost-oil audits to be resolved, for public enterprise accounts to be published more promptly, and for consistent compliance with procurement rules as spending grows. It also encouraged further work on anti-money laundering and anti-corruption measures, including a stronger Integrity Commission and asset declaration regime. On energy, it said the Gas-to-Energy project should reduce reliance on fuel-based power generation and lower costs. Investment in sea defences, drainage and climate-resilient agriculture remains important.

The Fund judged risks to the outlook to be broadly balanced. Further oil discoveries, stronger construction and higher oil prices could lift growth beyond projections. Oil price volatility, overheating pressures and climate shocks pose the main threats to it.

‍