—despite global conditions, IDB report highlights
DESPITE softer global oil prices and continued policy uncertainty around the world, Guyana’s oil and gas sector is expected to remain profitable and attractive to investors, with expanding production volumes helping to cushion the economic impact, according to an Inter-American Development Bank (IDB) Caribbean Quarterly report.
The report noted that global trends are weighing on oil prices, as subdued demand growth and ongoing policy uncertainty continue to dampen the market.
The report cited World Bank projections that oil prices will fall by 12.9 per cent to around US$68 per barrel in 2025, before declining further to about US$60 per barrel in 2026. Prices are expected to remain broadly within this range through to 2030.
If these projections materialise, Guyana could experience lower oil profits. However, the IDB emphasised that the impact of lower prices will be partly offset by a sharp increase in production.
The report highlighted that Guyana’s break-even oil price is estimated at just US$28 per barrel. As long as prices remain above this threshold, the oil sector is expected to stay profitable and continue to attract investor interest.
“As long as oil prices stay above US$28 per barrel, Guyana’s break-even price, the oil sector will remain profitable and attractive to investors. Investments in Guyana’s oil sector were forecast to reach US$77 billion between 2019 and 2028,” the report added.
Beyond oil, the IDB pointed to robust economic growth prospects for Guyana over the medium term.
The economy is expected to remain strong, supported by continued expansion in oil production alongside growth in non-oil sectors. Economic growth is forecast to average around 14 per cent between 2026 and 2030.
A key challenge identified in the report is the need to upgrade skills and human capital.
“The government is aware that it has to promote a major increase of human capital and has made provision for free tertiary education, such as funding thousands of scholarships and as well as supporting vocational training,” the report noted.
Nevertheless, the report cautioned that Guyana faces downside risks in the short to medium term. While the International Monetary Fund’s 2025 Article IV consultation found no clear evidence of Dutch Disease to date, it identified several indicators that warrant close monitoring.
These include the increasing concentration of economic activity in the oil sector, elevated and persistent government spending, rising inflation, appreciation of the real effective exchange rate, and growth and labour trends in non-oil industries such as gold mining and agriculture.
The IDB stressed that careful macroeconomic management and continued investment in human capital will be essential to ensure that Guyana’s oil-driven growth remains sustainable and broadly shared.
