-improved revenues, lower capital spending help narrow fiscal deficit in 2025

GUYANA’S fiscal position improved in 2025, with stronger revenues helping to narrow the country’s primary fiscal deficit, while overall debt levels remained highly sustainable, according to the latest Caribbean Economics Quarterly published by the Inter-American Development Bank (IDB).

The report, which examines fiscal resilience, debt reduction and domestic resource mobilisation across the Caribbean, noted that Guyana’s primary balance improved from -6.9 per cent in 2024 to -5 per cent in 2025.

The improvement came despite higher overall government expenditure, partly driven by increased transfer payments associated with the issuance of universal cash grants.

According to the IDB, the higher expenditure was offset by a larger increase in revenues, particularly non-tax revenues. The majority of these receipts 85.1 per cent, comprised oil profit withdrawals.

The report also pointed to a reduction in capital spending as another factor underlying the improved fiscal outturn.

Guyana has significantly increased capital expenditure since the commencement of oil production as the government seeks to address the country’s infrastructure deficit. Capital spending rose from 21.8 per cent of total expenditure in 2019 to 50.5 per cent in 2023 and 53.8 per cent in 2024.

However, in 2025, capital spending declined to 50.7 per cent of total expenditure, while its share of GDP fell from 11.5 per cent to 10.2 per cent.

The IDB noted that this marked the first decline in Guyana’s capital expenditure ratios since oil production began.

Meanwhile, Guyana’s overall debt remained at a highly sustainable level despite a modest increase in the debt ratio.

The country’s total debt ratio rose to 28.6 per cent in 2025 from 24.3 per cent in 2024, resulting in a higher external share of total debt at 56.3 per cent.

Nevertheless, the report highlighted that Guyana’s debt portfolio remained highly concessional, with multilateral creditors accounting for 66.2 per cent of the country’s debt.

Debt-service costs have also declined significantly, falling from an average of around seven per

cent of revenue during the 2014–2018 pre-oil period to five per cent during 2019–2025.

The IDB’s assessment therefore points to continued fiscal resilience, supported by stronger revenues, a more moderate pace of capital expenditure and a declining debt-service burden.