The IMF forecasts strong economic growth for Guyana, projecting a GDP increase of about 10¼ percent in 2025, with the non-oil sector growing by 13 percent. Significant risks include inflation and potential overheating. The report recommends maintaining fiscal sustainability and enhancing social transfers to foster inclusive growth.
The International Monetary Fund (IMF) has released a preliminary report following its 2025 Article IV Mission, highlighting Guyana’s robust economic transformation, primarily driven by the burgeoning Oil and Gas Sector alongside advancements in the non-oil sector. This growth has resulted in a staggering average real GDP increase of 47 percent from 2022 to 2024, positioning Guyana as the nation with the highest growth rate globally.
The IMF anticipates that Guyana’s Gross Domestic Product (GDP) will experience a growth of approximately 10¼ percent in 2025, with the non-oil economy projected to expand by 13 percent. However, inflation is expected to rise to around 4 percent by the end of 2025, compared to nearly 3 percent at the end of 2024. Furthermore, the budget deficit is forecasted to decrease to about 5 percent or less in 2025 due to increased oil revenues.
The IMF report also indicates a large current account surplus of 24½ percent of GDP in 2024, which is projected to moderate to approximately 9 percent of GDP in 2025. The team emphasizes that despite the anticipated decrease in surplus, the medium-term economic outlook for Guyana remains favorable with balanced risks, estimating an average growth rate of 14 percent annually over the next five years.
The upward growth forecast in the medium term is attributed to sustained oil production and a rising non-oil sector. It is estimated that the non-oil GDP will grow by an average of approximately 6¾ percent per year. However, the IMF cautions about potential risks, including overheating pressures, inflation fluctuations, and external economic uncertainties that could impact the macroeconomic outlook.
To maintain stability, the IMF recommends that the Guyanese authorities focus on fiscal sustainability and encourage inclusive growth. Recent social transfer initiatives have reportedly boosted disposable income and reduced poverty levels. Although there are currently no signs of economic overheating, the IMF suggests enhancing monitoring of macroeconomic conditions and implementing targeted social transfers to further encourage inclusive growth and work towards the sustainable development goal of eradicating poverty.
In summary, the IMF’s report underscores the significant economic transformation occurring in Guyana, driven by the expansion of its Oil and Gas Sector and developments in non-oil industries. Despite the promising growth forecasts, it is essential for the government to remain vigilant against potential risks related to inflation and economic overheating. Continued efforts towards maintaining macroeconomic stability and supporting inclusive growth are pivotal as the nation strives toward its sustainable development objectives.
Original Source: newssourcegy.com
