Last week, the International Monetary Fund (IMF) issued its 2026 preliminary report on Article IV Consultation on Guyana, following meetings held during the period 20-31 July 2026 with key government officials as well as with representatives from the private sector, banks, labour unions, and other stakeholders. Unfortunately, there is no evidence that the IMF team met with the political opposition, other civil society organisations, such as the Guyana Human Rights Association and Transparency Institute Guyana Inc., or journalists/commentators from the independent media who have some knowledge about the economy. Had it done so, the Fund would have benefited from a more balanced view of the performance and state of the economy, its future prospects and the extent to which all citizens, especially those in the lower rungs of the economic ladder and other vulnerable groups, benefit from what the Fund considered continuous strong growth since the discovery and production of crude oil resources.
The team appears not to have taken into account the Inter-American Development Bank’s assessment that 58 percent of the population lives below the poverty line, with 32 percent in extreme poverty. Nor did it consider the recent Bloomberg report on Guyana, warning about the resource curse hanging over the country’s head. That report also painted a gloomy picture of the country which ‘falls short on transparent and competitive rights allocation, local content participation, upholding the highest corporate environmental, social and human rights standards, and structuring tax and contract terms to capture the full value of its resources’. Other relevant matters that appeared to have escaped the attention of the team include: (i) the huge overdraft on the Consolidated Fund; (ii) excessive borrowings to finance the National Budget; (iii) Guyana’s latest score and standing on the Corruption Perceptions Index which continued to place it at the bottom of the table from among the English-speaking Caribbean; (iv) Guyana’s ranking of 115 out of 193 countries in 2023/2024 on the UNDP Human Development Index; (v) the lack of effective functioning of the Integrity Commission to hold public officials to account for their income and assets and liabilities as well as their lifestyles; (vi) the failure to appoint new members of the Public Procurement Commission for more than a year; and (vi) the six years of backlogged scrutiny of the public accounts by the Public Accounts Committee. Most of these relate to issues of governance where the team stated that it ‘welcomes ongoing efforts to further enhance public sector transparency and service delivery…’
Considering the above as well as other matters as discussed below, the report gives the impression that the team has taken a one-sided view of the performance and state of the economy as well as its future prospects, coinciding with the Government’s own assessment. This glorious and rosy assessment, with words of congratulations as to how well the economy is being managed, leads one to question whether the team was not acting a cheerleader for the Authorities. As one economist points out, it was a political report rather than an economic one!
GDP growth
According to the IMF, the economy continues to expand at a very rapid pace due mainly to oil production exceeding expectations and surpassing 900,000 barrels per day by the end of 2025, a 35 percent increase compared with the previous year, with similar volumes recorded in the first half of 2026. This performance has been supported by robust oil and non-oil activity.
Real Gross Domestic Product (GDP) grew by over 19 percent in 2025, following average growth of nearly 40 percent during the period 2023–2024. Growth in the non-oil economy continued at about 14 percent, with construction activities being the largest driver, while agriculture, mining, and manufacturing also contributing meaningfully. These trends broadly continued in the first half of 2026 though some sectors were affected by heavy rainfall.
By definition, GDP is the total market value of all goods and services produced within a country’s borders during any given time. Guyana is now a major oil-producing nation. However, considering that 87.5 percent of oil production belongs to ExxonMobil’s three subsidiaries, the total real GDP growth as a measure of economic progress has to be interpreted with extreme caution. One may ask: how much of this growth translates into real economic and social benefit for the ordinary citizens? Perhaps, a more meaningful measure is the use of the non-oil GDP growth.
According to the team, the Government’s prudent macroeconomic policies continue to support growth, building on the Low Carbon Development Strategy 2030 and the government’s five-year development plan.
Unemployment
Unemployment was 6.2 percent by the end of 2025, compared with 12.8 percent at the beginning of 2020 and 14.5 percent at the end of the third quarter of 2021. This significant reduction in unemployment from all appearance is being driven by the spin-offs from oil production.
Inflation
The average inflation was 3.3 percent in 2025 but edged up by mid-2026, reflecting higher global energy and food prices. Considering the unprecedented high cost of living as highlighted in numerous articles in the Stabroek News last year as well as earlier years, the 3.3 percent does not comport with the reality of the situation on the ground. It is, however, acknowledged that other factors are taken into account in the computation of the inflation rate.
Fiscal position
The overall fiscal deficit was 5.5 percent of GDP in 2025, with the non-oil primary deficit amounting to one third of non-oil GDP. Again, we may point out that the use of the country’s large GDP on account of oil production will show lower fiscal deficit as a percentage of GDP. The actual fiscal deficit for 2025 was $308.8 billion, representing some 25 percent of the 2025 Estimates. In its 2025 report, the Fund referred to the government’s commitment to eliminate the overall fiscal deficit over the medium term and highlighted the need for a comprehensive medium-term fiscal framework from which the National Budget is anchored. However, there has been no movement on both fronts, and the Estimates continue to be prepared in isolation of such a framework.
And in an earlier report, the IMF had stated that:
(a) The overall fiscal deficit should not exceed the amount withdrawn from the Natural Resource Fund (NRF).
(b) Given the sheer size of the expected oil transfers and fiscal spending, the policy priorities should be to avoid overheating and `Dutch disease’.
(c) There was a need to closely monitor macroeconomic and financial indicators and further tighten monetary policy stance.
(d) It is highly desirable for a comprehensive fiscal policy framework to be developed to guide spending decisions based on a Medium-Term Fiscal Framework (MTFF), along with further enhancements of the public financial management framework, including public investment.
(e) Transitioning to a zero overall fiscal balance over the medium term will allow the Government to meet its ambitious investment goals, while ensuring fiscal sustainability and intergenerational equity without creating macroeconomic imbalances.
Considering Guyana’s high income status in line with countries such as the United States, Canada, Australia, United Kingdom, France, Germany and Saudi Arabia by virtue of being a major producer of oil and gas, is it not time that there should be a balanced budget, meaning that expenditure should not exceed revenue earned? And should the Authorities not scale back on their ability to borrow to finance the National Budget and use some of the oil revenues to accelerate the repayment of the country’s debts, thereby relieving some of the burden of future generations to do so?
The income level status of a country is calculated using its Gross National Income (GNI) per capita based on its level of development. GNI is calculated by adding income from foreign sources to a country’s GDP, then deducting income earned by foreign residents and businesses that are sent abroad. The World Bank has classified countries into four income groups: low, lower-middle, upper-middle, and high. The income thresholds are as follows: low – US$1,145; lower middle – US$1,146 – US$4,515; upper-middle – US$4,516 – US$14,500; and high – over US$14,500. These classifications are for the fiscal year 2025 and are based on a country’s GNI per capita in 2023.
Guyana has been categorized as a high-income country. This categorization of Guyana works out to a GNI per capita of a little over G$3 million at a time when: (i) the private sector monthly minimum wage is G$60,147 while that of the public sector is G$100,000; (ii) 58 percent of the population lives below the poverty line, with 32 percent in extreme poverty; (iii) old age pension is $46,000 per month; and (iv) minimum National Insurance payment of G$43,075 per month. In fact, Guyana’s GNI per capita is 4.16 times the private sector minimum wage which is an indicator of the level of income disparities among the country’s population. These considerations appeared to have escaped the attention of the IMF in its assessment on Guyana.
To be continued
Discussion