The IMF reports that Guyana is experiencing rapid economic transformation, with GDP growing dramatically thanks to advances in both oil and non-oil sectors. A growth rate of 10¼ percent is projected for 2025 alongside lower budget deficits and a slight rise in inflation. The report emphasizes the importance of maintaining macroeconomic stability and fostering inclusive growth amid potential risks.
The International Monetary Fund (IMF) has released a preliminary report praising the ongoing economic transformation of Guyana, noting that it is progressing rapidly. This transformation is attributed to both the expanding Oil and Gas Sector and substantial growth in the non-oil sector. The IMF reported an extraordinary average real GDP growth rate of approximately 47 percent between 2022 and 2024, which positions Guyana as the country with the highest growth rate globally during this period.
The report forecasts a projected Gross Domestic Product (GDP) growth of around 10¼ percent in 2025, alongside a remarkable 13 percent increase in the non-oil economy. Inflation is anticipated to rise modestly to about 4 percent by the end of 2025 from almost 3 percent at the close of 2024. Additionally, the budget deficit is expected to decrease to approximately 5 percent of GDP in the coming year, influenced by increased oil revenues.
The IMF forecasts that the current account surplus will reduce from 24½ percent of GDP in 2024 to about 9 percent in 2025, as the nation prepares for the importation of a fourth oil Floating Production Storage and Offloading (FPSO) vessel. Moreover, the medium-term economic outlook for Guyana remains robust, with an expected average annual growth rate of around 14 percent over the next five years, primarily driven by both oil production and the expanding non-oil sector.
The report emphasizes the potential upsides, including further oil discoveries that may enhance Guyana’s economic trajectory. Conversely, risks such as overheating that could escalate inflation and impact the real exchange rate are highlighted as potential concerns. Other external threats, including commodity price volatility and climate change, could also influence the macroeconomic situation.
The IMF has urged Guyana’s authorities to maintain macroeconomic stability, fiscal sustainability, and promote inclusive growth. Recent social transfer programs have reportedly improved disposable income and reduced poverty rates. While there are currently no signs of overheating, the IMF stresses the necessity for vigilant monitoring of macroeconomic indicators and recommends implementing targeted social transfers to foster equitable economic growth and support Guyana’s sustainable development goals.
In conclusion, the IMF’s preliminary report highlights the significant economic advancement Guyana is experiencing, particularly in its oil and non-oil sectors. With projected robust growth rates, decreasing budget deficits, and a favorable medium-term outlook, the need for vigilant management of inflation and macroeconomic stability remains paramount. Ongoing social initiatives are also critical in reducing poverty and promoting inclusive growth.
Original Source: newssourcegy.com
