IDB notes increase in Guyana’s debt ratio

Aug 24, 2026 News

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…but hails “highly sustainable” debt levels

(Kaieteur News) – The Inter-American Development Bank (IDB) has stated that Guyana’s overall debt levels remain “highly sustainable” despite a slight increase in the country’s total debt ratio in 2025.

This is according to the bank’s latest Caribbean Economics Quarterly (CEQ) report titled “Fiscal Resilience, Debt Reduction and Domestic Resource Mobilization in the Caribbean.” The report examines the fiscal and debt trajectories of six Caribbean countries: Guyana, The Bahamas, Barbados, Trinidad and Tobago, Jamaica and Suriname.

As it relates to Guyana, IDB noted that the government’s fiscal deficit improved in 2025. It pointed to higher overall expenditure, driven partly by increased transfer payments associated with the government’s universal cash grants that was offset by a larger increase in revenues, which is attributed to non-tax revenues, with oil profit withdrawals.

It further stated that, also underlying the improved fiscal outturn was lower capital spending. IDB highlighted that Guyana has significantly increased capital expenditure since the start of oil production as it seeks to address its infrastructure deficit.

Capital spending rose from 21.8 percent of total expenditure in 2019, the year when oil production commenced to 50.5 percent in 2023 and 53.8 percent in 2024. To this end, the Bank pointed to recommendations from the International Monetary Fund (IMF) which recommended government to bring these expenditures down, with the aim of balancing the books in the medium term.

The report states that in 2025, capital spending as a share of total expenditure fell to 50.7 percent, while capital expenditure as a share of GDP declined from 11.5 percent to 10.2 percent. The IDB noted that this marked the first decline in the Government’s capital expenditure ratios since oil production began.

IDB said Guyana’s total debt ratio increased slightly to 28.6 percent in 2025, up from 24.3 percent in 2024 saying the financing gap resulted in increased holdings of external debt which rose to 56.3 percent. Despite the increase, the IDB said Guyana’s overall debt levels, “continue to be highly sustainable.” Further, the report also highlighted a significant reduction in Guyana’s debt service costs.

This revelation comes even as the country’s total public debt is expected to climb to US$10.3 billion by the end of 2026. Earlier this year, Senior Minister with responsibility for Finance, Dr. Ashni Singh, announced that Guyana’s total Public and Publicly Guaranteed (PPG) debt rose sharply to US$7.7 billion at the end of 2025, up from US$5.993 billion a year earlier. This publication had reported that government’s borrowing this year will move Guyana’s debt burden from US$7.7 billion at the end of 2025 to US$10.3 billion this year.

Kaieteur News recently reported the IMF endorsing the Government of Guyana’s borrowing strategy, concluding that the country’s debt remains sustainable. In its concluding statement following the 2026 Article IV Consultation, the IMF said government’s “prudent borrowing strategy continues to support debt sustainability, with the risk of debt distress assessed as low, as in the previous assessment.”

Moreover, the IDB report finds that half of the featured countries have successfully reduced their debt-to-GDP ratios below pre-pandemic levels, demonstrating the effectiveness of disciplined fiscal management and credible institutional frameworks.  However, the CEQ warns that the regional fiscal environment remains challenged due to tighter global financial conditions rather than deterioration in investor perceptions of the Caribbean.

“Caribbean nations have navigated an extraordinarily complex series of global shocks in the recent decade with impressive policy discipline,” said Anton Edmunds, IDB General Manager for the Caribbean.  “The data shows that substantial debt reduction is possible when governments maintain credible fiscal frameworks. Moving forward, the priority must be building more productive, fair, and resilient revenue systems that can finance both debt reduction and critical investments, including in disaster risk management,” he added

Moreover, a central finding of the report is that the region collects less revenue than it needs for sustainable development and disaster resilience. It was outlined that tax revenues in the Caribbean averaged 21 percent of GDP in 2023, which is below the Latin American average of 22 percent and the Organization for Economic Co-operation and Development (OECD) average of 34 percent.

CEQ highlights several cross-country reform priorities to address this gap, including modernising tax administration through digital technologies, rationalising tax incentives and exemptions, and strengthening stable revenue sources such as property taxation. Meanwhile, for oil and gas producers, the report stresses the importance of strong fiscal rules and sovereign wealth funds to smooth revenue volatility and preserve wealth for future generations.

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• debt levels, Debt Reduction, Guyana’s debt, IDB

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