Latest update October 30th, 2026 10:25 AM
President signals greater spending
…says declining debt-to-GDP ratio creating more fiscal space
(Kaieteur News) – Guyana’s Gross Domestic Product (GDP) has surged, recording massive growth over the past six years as the country’s oil and gas sector develops at break-neck speed.
This development has unlocked a new economic outlook for the country, reducing its debt-to-GDP ratio which measures a nation’s debt to its productive sectors, showing how well an economy can pay off what it owes.
President Irfaan Ali recently boasted about this progress registered under the leadership of the People’s Progressive Party (PPP), highlighting that the country can now increase its spending on certain areas.
President Irfaan Ali
Ali explained that four indicators are crucial when assessing a country’s debt burden. These include the debt to GDP ratio (debt relative to the size of the economy), debt service to revenue (how much government revenue goes toward principal and interest), external debt service to exports (the pressure on export earnings and foreign exchange reserves) and the debt composition (the domestic debt versus external debt, the maturities of the debt, interest rates and whether financing is concessional).
He said, “These are important elements for us to understand and the debt burden will allow us to have a clear understanding of how Guyana’s development was stymied because of this excessive debt burden, weak institutional framework and productivity deficit that allowed our debt to balloon in all of these categories.”
The President noted that this negatively affected the country’s ability to invest in education, health, housing, social services, infrastructure and other areas, leading to what he described as the “decay” in society and mass migration.
Although the country’s debt has steadily climbed, he said “tremendous strides” were made by the PPP since 1992 to reduce debt in Guyana. “From 1992 to now, the People’s Progressive Party Civic government made enormous strides towards reducing our debt and putting us in the strong position we are in today,” Ali boasted.
He highlighted major leaps in reducing publicly guaranteed debt from 47.4% to 24.3% in 2024. Notably, the President acknowledged the role of oil and gas in this transformation, pointing out that the “oil era” has changed all indicators.
He said, “When you look at what is in our Natural Resource Fund and you look at projected revenue you will see how easily we can cover our external debt.”
To this end, he signaled that the country can now spend more. “That allow of course more room for investment in health, education, social welfare, infrastructure, D&I (drainage and irrigation), agriculture- investment that allows us to continue to grow and expand the economy,” the President added.
Equally important according to him is growing the productivity sectors. To this end, he said, “we have to focus heavily on linking productivity to investment and ensuring that the growth of the private sector continue to be expansive, allowing the private sector to continue to be expansive.”
Kaieteur News recently reported that the Government of Guyana (GoG) in the first half of 2026 increased the country’s debt by nearly US$1B, growing the nation’s total Public and Publicly Guaranteed (PPG) debt to US$8,573.1 million at the end of June 2026.
It would be recalled that Guyana closed the year 2025 with a total debt burden of US$7.7B
Government has already signaled its intent to push the country’s debt to a staggering US$10.3B before the end of 2026.
Meanwhile, Guyana forked out 30% more than it did last year during the same period to repay its loans. According to the 2026 Mid-Year report, the total spent on debt service in the first half of 2026 was US$145.7M. During the same period last year, debt service payments were US$110M according to the 2025 Mid-Year Report.
Government reported higher debt service payments to both domestic and external creditors. It said domestic debt service amounted to US$44.2 million in the first half of 2026, while external debt service amounted to US$101.5 million in the review period.
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