In its most recent economic review of Guyana, the International Monetary Fund (IMF) has predicted a transformative shift in Guyana’s budget financing and debt dynamics over the next decade, from 2023 to 2033, propelled by a significant surge in oil revenues. This forecast aligns with Guyana’s rapidly expanding oil production, which is expected to increase from 101 million barrels in 2022 to 387 million barrels by 2028, according to an IMF projection.
Guyana’s journey into oil production began in 2019 with the Liza 1 project. The second Liza project started in 2022, and the Payara project commenced in November 2023, with production now approaching 500,000 barrels per day (bpd). The IMF’s report noted that its most recent projections are underscored by new numbers bolstered after approval of the Uaru project, marking a faster developmental pace than it previously anticipated.
President Irfaan Ali had said his government projects US$10 billion in annual inflows to Guyana’s oil fund by 2030.
The anticipated oil revenues are set to substantially cover the costs associated with the government’s increased spending in key areas like health, education, and infrastructure, the Fund stated. It expects these revenues to aid in gradually reducing the government’s overdraft with the central bank. The IMF also envisages an average real growth rate of 13.5% annually from 2023 to 2033, a testament to both the direct and indirect effects of the oil sector’s expansion on Guyana. This growth is expected to outpace the real interest rates on government debt, leading to a projected fall in the public debt-to-GDP (gross domestic product) ratio from nearly 30% in 2023 to 23.4% by 2033.
ExxonMobil continues to start and ramp up projects earlier than expected, further boosting projections of Guyana’s broader economic expansion. Whiptail, currently under review, and the potential Fangtooth project could further boost Guyana’s oil output. This escalation in production could exceed 1.5 million bpd, potentially outstripping the IMF’s already-optimistic current growth projections for the nation.
