Capital formation 2025

Dear Editor,
It is budget time again, and I want to wish all the Members of Parliament great success in their 2026 budget debates especially Dr Ashni Singh. In my readings, there is a piece of analytics that jumped out at me that caused me to write this, my first letter for the year 2026. In that regards it would be remiss of me not to seize the opportunity to wish you the Editors, Happy New Year’s and to your staff, and your readers.
Recent data revealed a marked increase in capital goods imports for Guyana. This situation should be interpreted as a positive indicator of economic confidence in our economy, backed by a higher than normal level of productive investment, rather than a cause for concern (based on figures reported by the Bank of Guyana and national trade statistics).

Capital goods—such as agricultural and industrial machinery, transport and construction equipment are not bought to be consumed immediately. They are used to increase productive capacity, improve efficiency, and support the expansion of future national output. Economic research has shown that the importation of capital goods can contribute to long-term and sustained income growth by enabling access to advanced equipment and technology. In most countries around the world that are falling behind, it is mainly because of inadequate research, low investment in, and usage of advanced technologies. The differentiator behind who will progress and who will fall behind during the next decade will be driven by which countries have the strategic plan and appetite to embrace advanced technology and train their nationals to use it effectively and efficiently.
The graph above illustrates capital goods imports for Guyana from 2019 to 2024. The graph illuminates that all key categories have risen significantly, by more than 300% in many cases, since 2020. This quantum of capital goods imports reflects a trend that is directly associated with expanded business activity and greater public and private sector investment. This is a very positive sign.
This trend aligns with the numbers that outlines our broader economic performance. Guyana’s non-oil economy has been expanding, with significant growth in sectors such as construction and services, supported by increased investment spending. Importing capital goods enables businesses to improve productivity, produce more with existing resources, and reduce their cost of production over time. As equipment and technology are put to use, they help raise output levels, support export-oriented industries, and enhance our global competitiveness. The only missing link now is the completion of the projects to supply lower-cost and more reliable electricity to the national grid and the massive industrialisation required to permanently transform Guyana. A major part of that challenge is expected to be overcome later this year with the coming online of the Wales Gas-to-Shore Project.
Moreover, higher capital goods imports can signal higher business and investor confidence. Firms generally commit to importing machinery and equipment when they anticipate stable demand and a supportive policy environment. Case in point, the CEO of ExxonMobil, Mr. Darren Woods made these comments on Venezuela on January 9, 2026 in the presence of President Donald Trump “If we look at the legal and commercial constructs—frameworks—in place today in Venezuela, today it’s uninvestable”. Juxtapose that against his comments on May 2, 2024 with regars to Guyana when he said, “Guyana is heading to become the most successful deepwater development in history”.
Some have expressed concern that higher imports could widen trade deficits. However, we must look “under the hood” of the economy to better understand what is happening. Capital goods imports are part of the broader process of economic transformation and productive investment—and when these imports translate into increased production and exports, they strengthen the balance of payments in the longer run. These investments often precede job creation in construction, manufacturing, logistics, and other sectors, as new projects ramp up and expand their requirements for more skilled labour. Thus, the policy of the Government of Guyana to accelerate skills training across all fronts must be celebrated.
In short, the expansion in capital goods imports reflects confidence, investment in productive capacity, and preparation for future economic activities. It is not merely increased spending on foreign goods but is a fundamental part of capital formation that is essential in the support of the sustainable growth path over the medium term.

Sincerely,
Sasenarine Singh,
MSc – Finance