By Kiana Wilburg
The International Monetary Fund (IMF) has commended the Guyana government’s approach to spending oil revenues in such a manner that resulted in increased disposable income and a reduced poverty rate. In a statement issued on Friday, the financial institution said it came to this conclusion following a meeting with key stakeholders. This included government and opposition officials, as well as figures within the business community.
At the conclusion of these engagements, the IMF team, which routinely reviews Guyana’s economic wellbeing, commended local authorities for its “continued commitment to maintaining macroeconomic stability, ensuring fiscal sustainability, and fostering inclusive growth.”
The group also said Guyana’s economic transformation is advancing at a strong pace and is even broadening in scale due to the onset of oil revenues. This approach in revenue management it said, paved the way for strong non-oil output and large-scale public infrastructure investment. This it said allowed Guyana to have the highest real GDP growth rate in the world, at a recorded average of 47 percent in 2022–24.
The IMF said real GDP and real non-oil GDP are projected to grow by about 10¼ percent and 13 percent in 2025, respectively while inflation is expected to edge up to around 4 percent by end-2025.
As for the medium-term economic outlook, the IMF said this remains highly favourable with balanced risks. In this regard, it said the economy is expected to grow on average 14 percent per year over the next five years, driven by robust oil production amid a growing share of the non-oil sector. Non-oil GDP is projected to expand on average by about 6¾ percent per year.
As for risks to the outlook, the IMF said these are broadly balanced. While there are no clear signs of overheating, the financial institution said enhancing the close monitoring of macroeconomic developments and continuing to proactively respond through tighter policies would be essential to ensure that the economy avoids overheating and remains on a balanced expansion path.
Overall,. the IMF said social transfer policies implemented in recent years have no doubt “increased disposable income and reduced the poverty rate.” Going forward, it said, “Additional targeted transfers, integrated into a medium-term fiscal framework, could further support inclusive growth and help Guyana advance faster toward its sustainable development goal (SDG) of no poverty.”
