SENIOR Finance Minister Dr Ashni Singh on Thursday welcomed the favourable assessment given by the International Monetary Fund (IMF) on both the economic policies being implemented by the government and the strong performance of the Guyanese economy.

In its latest Article IV Consultation, the IMF lauded Guyana’s exceptional economic performance, citing the country’s rapid oil-fuelled transformation and robust non-oil growth.

The IMF declared Guyana’s economic outlook “highly favourable,” supported by strong fundamentals, balanced risks, and a resilient external position.

“Guyana’s economic transformation is advancing strongly and broadening in scale,” the IMF said in a statement following the Executive Board’s review.

“Rapidly expanding oil production, strong non-oil output, and large-scale public infrastructure investment supported the highest real GDP [Gross Domestic Product] growth rate in the world, averaging 47 percent per year since 2022.”

According to the report, real oil GDP surged nearly 58 per cent in 2024, while non-oil GDP grew by over 13 per cent, demonstrating the country’s steady progress in diversifying economic activities even as the energy sector drives momentum.

The IMF noted that inflation remained moderate, reaching 2.9 per cent by the end of 2024, up slightly from two per cent the year before. This was primarily due to international food price pressures and domestic flooding that affected supply chains.

Guyana’s fiscal stance, while expansionary, reflects the government’s focus on meeting urgent development needs. The IMF noted that the overall fiscal deficit widened from 5.1 per cent of GDP (11.7 per cent of non-oil GDP) in 2022 to 7.3 per cent (21 percent of non-oil GDP) in 2024, largely due to a sharp increase in capital spending.

Despite this, the country’s external accounts remain robust. “Driven by higher oil exports, Guyana’s current account surplus more than doubled in 2024, reaching about 24½ per cent of GDP,” the report stated. Gross international reserves topped US$1 billion by the end of 2024, while the Natural Resource Fund (NRF) accumulated over US$1.1 billion during the year, bringing its total to US$3.1 billion—equivalent to over 12½ per cent of GDP.

The economic outlook remains highly favourable. Looking ahead, the IMF projects that Guyana’s economy will grow at an average annual rate of 14 per cent over the next five years, fuelled by oil production and spillover benefits to other sectors. Real non-oil GDP growth is expected to average around 6¾ per cent, significantly higher than the pre-oil decade average.

“Positive spillovers from the oil sector and improvements in infrastructure, productivity, and resilience are expected to boost real non-oil GDP growth,” the report stated. Inflation is forecast to rise moderately to around four percent in 2025, but fiscal and external balances are expected to narrow slightly, with continued savings in the NRF reinforcing economic stability.

Over the medium term, the continued expansion of oil production will further strengthen the external position, with substantial savings accumulation in the NRF.

Risks to the outlook were deemed “broadly balanced.” Upside risks include further oil discoveries and productivity-enhancing investments, particularly those aimed at bolstering energy resilience.
“On the upside, additional oil discoveries and productivity-enhancing investments, including to strengthen energy resilience would further bolster Guyana’s long-term economic prospects, while expanding construction activity would support higher short-term non-oil GDP growth.”

However, the IMF cautioned about potential downside risks such as overheating pressures, which could lead to inflation spikes and an overvalued exchange rate.

Global commodity price swings and climate-related disruptions continue to pose significant risks to Guyana’s economic outlook.

“Commodity price volatility in a highly uncertain global environment, including from trade policy and climate shocks, could also adversely affect inflation and alter the macroeconomic outlook,” the IMF said.

IMF COMMENDATIONS

Executive Directors of the IMF praised Guyana’s commitment to balancing growth with macroeconomic stability.

“Directors welcomed Guyana’s remarkable economic progress to attain high-income status, supported by rapidly expanding oil production and robust non-oil growth,” the Board noted. “They commended the authorities’ commitment to balancing development needs with prudent policies to entrench macroeconomic and fiscal stability.”

They noted that Guyana’s economic outlook remains highly favourable with balanced risks, strong fundamentals, and a strong external position supported by substantial accumulation of oil revenue in the NRF.

The directors concurred that the current fiscal stance is appropriate given development needs. They welcomed the authorities’ commitment to eliminate the overall fiscal deficit over the medium term and further narrow the non-oil primary deficit to levels consistent with ensuring intergenerational equity and preserving fiscal and macroeconomic sustainability.

“They highlighted the need for a comprehensive medium-term fiscal framework with an explicit anchor and an operational target,” the Board added, encouraging regular evaluations of spending related to development objectives.

They highlighted the need for a comprehensive medium-term fiscal framework with an explicit anchor and an operational target, along with regular assessments of expenditure related to reaching development objectives. They positively noted the authorities’ continued efforts to strengthen public financial management as well as the low risk of debt distress given low public debt.

Additionally, the directors considered the monetary policy stance as appropriately tight to help contain inflation, while noting the need for further tightening if inflation risks escalate. They saw merit in enhancing the monetary policy toolkit and deepening financial markets to help strengthen the effectiveness of monetary policy transmission.

Directors highlighted the need for policy consistency to support Guyana’s stabilised exchange rate regime, which they said remains appropriate at this stage of economic development. However, they also encouraged authorities to assess the potential benefits of moving toward a more flexible exchange rate framework in the medium term, as the economy continues to evolve and diversify.

The Board also commended the government’s commitment to preserving financial stability, applauding ongoing efforts to improve financial sector oversight. This includes monitoring risks related to sectoral lending and transactions involving related parties, as well as strengthening macroprudential supervision and broadening regulatory oversight.

To support sound financial management, the IMF called for improved statistical coverage, particularly in relation to institutional balance sheets and real estate price data.

Further, the IMF welcomed Guyana’s broader efforts to foster inclusive growth and expand economic diversification. Directors noted progress in improving the business climate, advancing climate and energy resilience, and building workforce skills.

They also recognised improvements in governance and transparency, particularly within the areas of anti-corruption, anti-money laundering and counter-financing of terrorism (AML/CFT), and public financial disclosure—encouraging continued alignment with international standards.

The next Article IV consultation between the IMF and Guyana is expected to occur in 12 months, following the standard review cycle.