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Rising fiscal pressures, structural risks flagged in CDB outlook on Guyana
…acknowledges strong oil-driven growth and macroeconomic resilience
(Kaieteur News) – The Caribbean Development Bank (CDB) says Guyana remained the region’s dominant economic performer in 2025, but warned of fiscal pressures and structural risks.
In its Caribbean Economic Review and Outlook 2025-2026, released late last month, the CDB estimated that Guyana’s economy expanded by 19.5% in 2025, making it by far the fastest-growing economy in the Caribbean. While lower than the extraordinary 43.6% growth recorded in 2024, Guyana continued to be the principal driver of regional economic growth.
The bank noted that Guyana’s oil production rose by 15.8% to 261 million barrels, averaging about 715,000 barrels per day, supported by the start-up of the Yellowtail development and optimisation at the Payara project.
Beyond oil, the CDB highlighted strong expansion in the non-oil economy, driven by major public investments in roads, bridges, energy infrastructure and social facilities, as well as private investment in tourism and real estate. Agriculture and services also recorded solid growth.
However, the report also identifies several areas of concern. It noted that massive spending continues to drive deficits.
Despite booming revenues, Guyana’s fiscal position remained in deficit because of its aggressive public investment programme.
According to the CDB, government expenditure increased by 13.4% to US3.3 billion, equivalent to 12.1% of GDP. Current expenditure also rose sharply by 21.2%.
Although revenues and grants jumped 27.4% to US$4.8 billion, supported by higher tax collections and resource revenues, the scale of spending meant Guyana still recorded an overall fiscal deficit of 5.5% of GDP and a primary deficit of 5.1% of GDP.
Trade pressures emerging
The report also points to a weakening external position. Unlike Trinidad and Tobago and Suriname, Guyana experienced a decline in exports while imports increased, resulting in a smaller merchandise trade surplus.
The CDB noted that Guyana’s international reserves increased during the year, but remained below the commonly used benchmark of three months’ import coverage when the Natural Resource Fund is excluded from the calculation.
That finding underscores the reality that rapid growth is being accompanied by equally rapid import demand for machinery, construction materials, equipment and consumer goods.
Inflation remains manageable
The bank reported that inflation in Guyana increased slightly to 3.3% in 2025 from 2.9% in 2024, though it remained moderate by regional standards. Government measures, including maintaining a zero-excise tax on fuel and reducing freight charges on imports, helped contain price pressures. The report noted that gasoline prices fell by 20.9% during the year.
Guyana to remain growth leader
Looking ahead, the CDB projects that Guyana’s economy will grow by an even stronger 21.9% in 2026, driven by a projected 25.3% increase in oil production to 327.3 million barrels. The country’s performance is expected to lift overall Caribbean growth to 6.2%, compared with just 1.1% for the rest of the region excluding Guyana.
Throughout the review, the CDB repeatedly stresses the need for stronger implementation capacity, improved project execution, resilient institutions and prudent fiscal management. It warns that the Caribbean faces heightened risks from global uncertainty, geopolitical tensions, commodity price volatility and climate shocks.
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