IMF: Guyana’s economy projected to grow at 14 per cent over next five years

Guyana’s economy is set to grow by an average of 14 per cent per year over the next five years, driven by strong oil production and an expanding non-oil sector, the International Monetary Fund (IMF) said.

In its latest assessment, the IMF projected that non-oil GDP would expand by about 6.75 per cent annually.

While the economic outlook remains positive, the organisation warned of risks such as inflation, overheating pressures, and exchange rate appreciation, which could threaten financial stability.

The IMF said Guyana’s economic prospects could improve further with additional oil discoveries and productivity-enhancing investments, particularly in energy resilience.

However, it also highlighted risks that could disrupt growth, including commodity price volatility, climate-related shocks, and economic overheating, which could push inflation higher.

Despite these concerns, the IMF described the country’s fiscal policy stance as appropriate, given its development and investment needs.

It noted that the increased withdrawal ceiling from the Natural Resource Fund (NRF) in early 2024 allowed for significant capital expenditure, exceeding 12.5 per cent of GDP this year.

The IMF recommended gradually closing the overall fiscal deficit by 2031 and reducing the non-oil primary deficit over time to ensure long-term economic sustainability.

It urged the government to implement a comprehensive medium-term fiscal framework, modernise public financial management systems, and conduct regular expenditure reviews to enhance efficiency and transparency.

Guyana’s rapid economic transformation has been evident in recent years.

Between 2022 and 2024, the country recorded an average real GDP growth rate of 47 per cent—the highest in the world. The non-oil sector, particularly construction and services, continues to show strong performance.

This year , the IMF forecasts real GDP growth of 10.25 per cent and non-oil GDP growth of 13 per cent. Inflation is expected to rise to around four per cent by the end of 2025, up from three per cent at the end of 2024.

The fiscal deficit is projected to narrow from 7.3 per cent of GDP in 2024 to just under five per cent in 2025, as rising oil revenues help offset increased government spending.

The current account surplus, which stood at 24.5 per cent of GDP in 2024, is expected to decline to nine per cent in 2025 due to higher imports related to the fourth Floating Production Storage and Offloading (FPSO) vessel.

With its booming oil industry and strengthening non-oil sector, Guyana remains on a strong economic trajectory.

However, the IMF stressed that careful fiscal management and strategic investment will be crucial in maintaining stability, ensuring sustainable growth, and securing long-term prosperity for future generations.