Though Guyana is poised to produce over 800,000 barrels of oil from its four sanctioned projects, the Government has been prudent in guarding against wild spending and borrowing against the resources to come.
And the International Monetary Fund (IMF) was in high praise of the administration for such rigid controls. It said Guyana’s public debt declined almost 10% of its gross domestic product (GDP), reaching 42.9% of GDP at end of 2021, one of the lowest in the region.
It predicts that with such caution, Guyana could see public debt accounting for only 22.8% and 20.9% in 2022 and 2023 respectively. It also predicts that the coming of more oil revenues will see public debt plummeting to a historic 13.5% of GDP.
Expounding on its observations for 2021, the IMF said total gross public debt has declined significantly over the past decade, driven by repayments, and prudent debt management. In this regard, it reiterated that Guyana’s total public-sector debt declined to 42.9% of GDP from 57.7% of GDP in 2011.
The Fund said rice exports to Venezuela helped Guyana repay part of its debt owed to that country under the PetroCaribe agreement (which was suspended since 2015 following the revival of a border dispute). It said there has been no further borrowing from Venezuela since then. In addition, IMF officials said Guyanese authorities have been prudent in accumulating new public debt and the oil production since 2020 has helped to reduce the ratio.
Further, the financial institution also noted that the risk of external and overall debt distress for Guyana remains moderate as observed in the previous Debt Sustainability Analysis conducted in July 2019.
The IMF said there are significant favourable upside risks to the outlook for debt dynamics in the medium- to long-term given the latest projections of high oil prices and continuing discoveries of new oil fields, which will help Guyana build up significant external buffers against adverse shocks.