Rising Fiscal Pressures and Structural Risks Flagged for Guyana

  • The Caribbean Development Bank (CDB) has expressed that Guyana remained the region’s dominant economic performer in 2025, but warned of fiscal pressures and structural risks.
  • In its Caribbean Economic Review and Outlook 2025-2026, the CDB estimated that Guyana’s economy expanded by 19.5% in 2025, making it the fastest-growing economy in the Caribbean. While lower than the extraordinary 43.6% growth recorded in 2024, Guyana continued to be the principal driver of regional economic growth.
  • Nevertheless, the report identified several areas of concern as massive government spending continues to drive deficits. Despite booming revenues, Guyana’s fiscal position remained in deficit on the back of its aggressive public investment programme. According to the CDB, government expenditure increased by 13.4% to US$3.3Bn (12.1% of GDP) while current expenditure also rose sharply by 21.2%. Although revenues and grants jumped 27.4% to US$4.8Bn, supported by higher tax collections and resource revenues, the scale of spending meant Guyana still recorded an overall fiscal deficit of 5.5% of GDP and a primary deficit of 5.1% of GDP.
  • Further to this, unlike Trinidad and Tobago and Suriname, Guyana experienced a decline in exports while imports increased, resulting in a smaller merchandise trade surplus. Guyana’s international reserves increased during the year but remained below the commonly used benchmark of three months’ import coverage when the Natural Resource Fund (NRF; US$3.43Bn at the end of 2025) is excluded from the calculation. That finding underscores the reality that rapid growth is being accompanied by equally rapid import demand for machinery, construction materials, equipment and consumer goods.
  • Looking ahead, the CDB projects that Guyana’s economy will grow by an even stronger 21.9% in 2026, driven by a projected 25.3% increase in oil production to 327.3 million barrels. The country’s performance is expected to lift overall Caribbean growth to 6.2%, compared with just 1.1% for the rest of the region.
  • Throughout the review, the CDB repeatedly stressed the need for stronger implementation capacity, improved project execution, resilient institutions and prudent fiscal management. It also warned that the Caribbean faces heightened risks from global uncertainty, geopolitical tensions, commodity price volatility and climate shocks.

(Sources: Kaieteur News & Bank of Guyana)