Guyana

Double-digit growth, driven by the boom in the oil sector

The Guyanese economy continues to enjoy exceptional growth, well above that of its neighbours on back of an expanding oil sector. After a high base effect in 2024, growth automatically moderated in 2025. Although oil production increased, peaking at 754,400 barrels per day (bpd) after the Yellowtail field came on stream in August, volumes failed to maintain the sustained pace of previous years. Unlike 2024, when the Payara field was launched at the beginning of the year, 2025 saw no new projects come on stream throughout the year, limiting oil GDP growth to 9.5%, compared to 57.7% in 2024. In addition, oil prices were less favourable than in 2024.

2026 promises to be another milestone year, with a full year of production from the four existing oil fields (Liza 1 and 2, Payara, and Yellowtail) operated by the Stabroek consortium, comprising Exxonmobil (45% stake), Chevron (30%), and CNOOC (25%). The commissioning of the fifth project, Uaru, will bring production capacity to around 1.3 million bpd. In addition, the Whiptail project, scheduled to come on stream in 2027, and the Hammerhead project (2029) announced in October 2025, will bring production to around 1.7 million bpd by 2030. In addition to oil extraction, the energy sector (75% of GDP) will stimulate the entire economy. The Gas-to-energy project, which is expected to be introduced in 2026, will exploit gas associated with oil production and is expected to generate 300 MW of electricity to power businesses and households. Investment, both private in the oil sector and public in energy and infrastructure projects, will remain strong. It will support robust domestic demand, driven by employment, rising wages, and social spending. Non-oil activities will also benefit from a knock-on effect, including construction and services (hotels, restaurants and transportation). The economy will also benefit from the dynamism of the gold sector (4.2% of exports in 2024). However, the sugar cane industry is expected to suffer from management concerns at the state-owned company Guysuco. In addition, rice farming has recently been affected by adverse weather conditions.

Last, since August 2025, Guyanese exports to the US, its second-largest customer (accounting for 15% of total exports in 2024), have been subject to a 15% tariff. The impact is negligible since almost all exports to the US – crude oil (81% of total exports, 93% of which are destined for the US), gold, and aluminum ore – are exempt.

Public accounts bolstered by oil revenues

The budget deficit narrowed in 2025 on back of rising oil revenues (40% of total revenues). However, its significance is limited as it depends largely on transfers from the sovereign wealth fund. The deficit relative to non-oil GDP is consistently much higher (respectively -21% and -13.2% in 2024 and 2025). Since 2019, oil revenues have been managed by the Natural Resources Fund (NRF), which had a market value of USD 3.6 billion in September 2025 (12.1% of GDP). The amount reflects the accumulation of oil sales corresponding to the state's share in exploitation and royalties paid to the NRF, as well as gains generated by its financial investments. The NRF withdrawal rules, which were revised in 2024, now allow for higher transfers to the national budget (up to USD 2.5 billion in 2025, compared to total payments of USD 2.6 billion in 2024). However, withdrawals cannot exceed the previous year's payments and must be approved by Parliament. These withdrawals have enabled the government to finance targeted social transfers (pension increases, public assistance for vulnerable adults, family allowances), tax cuts and purchasing power subsidies. In addition, the government is investing in human capital, with free university education, and is pursuing major infrastructure projects, such as the Demerara Bridge.

In 2026, fiscal policy is expected to remain focused on using oil revenues to maintain investment levels and social spending. The commissioning of the Uaru field will increase production and revenues, offsetting more moderate oil prices amid oversupply. The government intends to extend the fiscal and social measures adopted in 2025, while financing new projects in defence, health and education. Pressure on spending will remain high due to public sector wage increases and the strengthening of social benefits and pensions. This expansionary fiscal policy is stimulating domestic demand and putting upward pressure on consumer prices. In this context, the Bank of Guyana (BoG), which has to deal with a fixed exchange rate with the US dollar, can only act through open market operations and reserve requirements. To ease these pressures, the BoG raised the reserve requirement ratio from 10% to 12% in September 2022, while injecting liquidity at a rate lower than non-oil GDP growth.

The financing strategy is based on conservative debt management. The government favours transfers from the NRF to avoid increasing the deficit and raising the debt ratio, followed by domestic borrowing and multilateral concessional financing. Carbon credits supplement these resources. As a result, external debt (40% of total public debt) fell to 9% of GDP in 2024. It is more than covered by NRF assets, which eliminates the foreign currency liquidity risk. It is mainly held by multilateral institutions (58% at the end of 2024, notably the Inter-American Development Bank) and by bilateral creditors, mainly China. Last, domestic debt, which mainly consists of Treasury bills held by the BoG, has stabilissed.

Recurring current account surplus

The current account surplus moderated in 2025, driven by lower oil prices and imports of the One Guyana floating production unit for the Yellowtail project. The surplus is expected to increase slightly in 2026 as the One Guyana field reaches full capacity, which will support oil exports. However, demand for imports will remain high, particularly in the extractive and construction sectors. The primary income deficit will persist, with the repatriation of profits by foreign companies; however, most of their profits are expected to continue to be reinvested in Guyana. In addition, the services balance deficit will increase, linked to payments for construction and services related to oil operations. The secondary income surplus will continue to decline as remittances from expatriates grow at a slower pace than GDP. In addition, occasional foreign currency shortages associated with strong household demand for imported goods have led to persistent complaints from local commercial banks. In response, and in a bid to stabilise the exchange rate (1GUD = 0.0048USD), the BoG has intervened by injecting USD 1.2 billion into the financial system since the beginning of 2025, more than three times the total amount for 2024.

Foreign exchange reserves reached USD 1 billion at the end of 2024, covering one month of imports. This low level is distorted by the deposit of a large portion of the government's oil revenues in the NRF, as well as the recovery of costs incurred by oil operators to finance the capital imports necessary for exploration and production. In future, increased oil production should generate sufficient foreign exchange inflows to enable a gradual accumulation of reserves.

Reelection of Irfaan Ali amid ongoing tensions with Venezuela

The incumbent President Irfaan Ali was re-elected by a large majority in the September 2025 general election. His centre-left People's Progressive Party/Civic (PPP/C) won 55.3% of the vote and 36 of the 65 seats in the National Assembly, consolidating its position but falling short of the two-thirds majority needed to amend the Constitution. Unlike the 2020 election, the election took place without major controversy, buoyed by the economic boom in oil and nationalist mobilisation in the face of tensions with Venezuela. Traditionally structured along ethnic lines, Guyana's political landscape has seen a slight blurring of these divisions. The PPP/C, supported mainly by Indo-Guyanese (40% of the population), won eight of the ten regions, including Demerara-Mahaica, the historic stronghold of the APNU (A Partnership for National Unity, traditionally supported by Afro-Guyanese, who represent 30% of the population), while the latter lost several of its strongholds to the new We Invest in Nationhood (WIN) party.

Internationally, the border dispute with Venezuela over Essequibo, a strategic oil-rich territory covering two-thirds of Guyana, remains the main source of instability. Based on the 1899 Paris arbitration award, which Caracas has openly rejected since Guyana's independence in 1966, this dispute took on crucial importance with the 2015 oil discoveries in the Stabroek block. Guyana referred the matter to the International Court of Justice (ICJ), which recognised its jurisdiction in April 2024. Despite a bilateral agreement not to use force, Caracas has stepped up its military activities, increasing incidents and provocations ahead of the 2025 elections, while the US and the UK have endorsed their deterrent military support for Guyana. Guyana also supports US efforts to combat drug trafficking in the region but specifies that this does not constitute support for military action against Venezuela. The ICJ's decision, which is expected in 2026, could lead to an escalation if it legitimises the Guyanese border and is rejected by Caracas. Last, China will be in a delicate position. While its state-owned CNOOC group co-operates Guyana's oil fields, Beijing is a key political and economic partner of Venezuela.

Last updated:October 2025