“No clear signs of overheating” – IMF’s country report on Guyana

…says economic outlook remains highly favourable

The International Monetary Fund (IMF) has said that Guyana’s economic transformation is advancing strongly and broadening in scale, setting up the country for a highly-favourable economic outlook with no signs of overheating.
The IMF Executive Board recently concluded the 2025 Article IV Consultation with Guyana, lauding the country’s economic progress to attain high-income status that was supported by its rapidly-expanding oil production and robust non-oil growth.
“They noted that Guyana’s economic outlook remains highly favourable with balanced risks, strong fundamentals, and a strong external position supported by substantial accumulation of oil revenue in the Natural Resource Fund. They commended the authorities’ commitment to balancing development needs with prudent policies to entrench macroeconomic and fiscal stability,” a release from the IMF on Wednesday detailed.
Only in March, a staff team from the IMF completed their 2025 Article IV Consultation with Guyana. The consultation, held both virtually and in-person in Georgetown from February 24 to March 7, 2025, involved discussions with high-level Government officials as well as stakeholders from the Private Sector, labour unions, and banks.
In the Staff Report, it was noted that ramped-up oil production coupled with strong non-oil growth and large-scale infrastructure investment, is supporting Guyana’s real Gross Domestic Product (GDP) growth rate – the highest in the world at a recorded average of 47 per cent between 2022 and 2024.
“The Government is making significant investments, funded by oil revenue, to promote inclusive and sustainable development while striving for resilient growth. Fundamentals remain strong, with no clear signs of overheating, amid substantial accumulation of the oil revenue windfall in the Natural Resource Fund (NRF),” the Staff Report detailed.
It went on to note that oil production will continue expanding rapidly and non-oil real GDP growth will remain strong, largely supported by the government’s efforts to invest in infrastructure – including for climate change adaptation, promote economic diversification, and improve welfare.
Moreover, the Staff Report stated too that risks to the economic outlook are broadly balanced. It said further oil discoveries and productivity-enhancing investment would improve Guyana’s long-term economic prospects, while expanding construction activity may support higher short-term non-oil GDP growth.
On the downside, however, it cautioned that overheating pressures, if not contained, would lead to higher inflation and real exchange rate appreciation beyond the level consistent with a balanced expansion of the economy, negatively impacting medium-term growth. In addition, commodity price volatility in a highly- uncertain global environment and climate shocks could adversely affect food inflation and alter the macroeconomic outlook.
“Maintaining macroeconomic stability remains the overarching policy priority given the sheer size of the expected oil revenue inflows and fiscal spending. Enhancing the monitoring of macro-financial developments and proactively responding through tighter fiscal, monetary, and macroprudential policies, as needed, will be essential to ensure that the economy avoids overheating and the adverse effects commonly associated with “Dutch Disease”,” the Staff Report detailed.

Eliminate fiscal deficit
On the other hand, the IMF Executives welcomed the Guyana Government’s commitment to eliminate the overall fiscal deficit over the medium term and further narrow the non-oil primary deficit to levels consistent with ensuring intergenerational equity and preserving fiscal and macroeconomic sustainability. They highlighted the need for a comprehensive medium-term fiscal framework with an explicit anchor and an operational target, along with regular assessments of expenditure related to reaching development objectives. They also positively noted the continued efforts to strengthen public financial management as well as the low risk of debt distress given low public debt.
The Executive Directors considered the monetary policy stance as appropriately tight to help contain inflation, while noting the need for further tightening if inflation risks escalate. They saw merit in enhancing the monetary policy toolkit and deepening financial markets to help strengthen the effectiveness of monetary policy transmission. They also emphasised the need for maintaining consistent policies to support the stabilised exchange rate arrangement, which remains appropriate, and saw merit in assessing whether transitioning to a more flexible exchange rate regime over the medium term could be beneficial as Guyana’s economy continues to transform.
“Directors welcomed the [Guyanese] authorities’ commitment to maintain financial stability and continue enhancing financial supervision, including monitoring sectoral lending exposures and related-party lending. They supported the authorities’ efforts to further strengthen risk monitoring, strengthen the macroprudential framework, broaden regulatory coverage, and enhance statistics on balance sheets and real estate prices,” the report detailed.
According to the IMF, the next Article IV consultation with Guyana will be held on the standard 12-month cycle.
In its April 2025 Outlook, the IMF projected that Guyana’s real GDP will expand by some 10.3 per cent this year with non-oil GDP projected to increase by about 13 per cent – the highest for the region. Similarly, it also predicted a whopping 23 per cent GDP growth next year.