Guyana Emerges as One of the World’s Fastest-Growing Economies, IDB Report Says
Georgetown, Guyana continues to stand out among the world’s fastest-growing economies as its expanding oil industry drives exceptionally strong economic growth while government finances and labour-market conditions show notable improvements, according to the latest Caribbean Economics Quarterly from the Inter-American Development Bank (IDB).
The IDB assessment highlights the remarkable transformation taking place in the South American country following the rapid expansion of oil production. Guyana’s economy grew by 19.3% in 2025, following an extraordinary 43.8% expansion in 2024.
Oil Remains the Main Growth Engine
The development of Guyana’s petroleum industry continues to be the central factor behind the country’s economic expansion.
Oil production has generated substantial revenues and helped finance public investment in infrastructure and other development priorities. However, the latest IDB figures also indicate that economic activity outside the petroleum industry is expanding rapidly.
The non-oil economy grew by 15% in 2025, compared with 13% in 2024. This suggests that the benefits of the country’s resource boom are spreading beyond the oil sector into other parts of the economy.
Employment Conditions Improve Sharply
The country’s rapid economic expansion has also coincided with a significant improvement in employment.
According to the IDB report, Guyana’s unemployment rate fell from 14.5% in the third quarter of 2021 to 6.8% in the same period of 2024.
The improvement represents a major change in labour-market conditions within only a few years and reflects the strong demand for workers generated by rapid economic expansion.
Guyana’s population has also increased substantially over the past decade, rising from roughly 700,000 people to around 900,000.
Debt-Service Pressure Declines
One of the most notable findings of the IDB assessment concerns Guyana’s debt position.
Despite substantial borrowing for roads, schools and other infrastructure, the share of government revenue required for debt servicing has declined.
Before the country’s oil boom, debt payments represented roughly 7 cents of every dollar collected by the government. That figure has now fallen to approximately 5 cents.
The IDB describes Guyana as an outlier in the Caribbean because of its relatively low debt burden and strong resource revenues.
This provides the government with greater fiscal room compared with several other countries in the region.
Strong Growth Expected to Continue
The International Monetary Fund expects Guyana’s economy to continue expanding rapidly in the coming years.
Current projections cited in reporting on the IDB assessment indicate growth of approximately 16.2% in 2026, followed by 19.7% in 2027 and 22.1% in 2028.
Growth is then expected to moderate as oil production stabilises, with the economy projected to expand by 12.8% in 2029, 11.5% in 2030 and around 1.1% in 2031.
The projected slowdown does not necessarily indicate an economic crisis. Rather, it reflects the expectation that the exceptionally rapid expansion associated with new oil production will eventually give way to more normal growth rates.
Government Focuses on Managing Oil Wealth
Guyana’s rapid transformation also creates a major policy challenge: ensuring that petroleum wealth produces lasting benefits for the broader population.
The IDB has pointed to Guyana’s Natural Resource Fund rules, relatively concessional debt structure and low debt-service burden as factors supporting macroeconomic stability.
The government has also introduced measures intended to cushion households and businesses from external pressures, including fuel-tax policies, electricity subsidies and cash-support programmes.
Non-Oil Development Remains Important
Despite the dominance of petroleum, Guyana’s long-term economic prospects will depend partly on whether the country can build stronger non-oil industries.
The IDB’s country strategy for Guyana has focused on areas including resilient infrastructure, human capital, health, education and institutional capacity, while also encouraging diversification of the non-oil economy.
Such diversification could become increasingly important as oil production eventually reaches a more stable level.
External Risks Remain
The outlook is not without challenges.
Guyana remains exposed to changes in international oil prices because petroleum revenues play such a large role in its economy. Geopolitical tensions and volatility in global energy markets could therefore affect government revenue and economic performance.
The IDB has nevertheless assessed Guyana’s macro-fiscal risks as manageable, supported by strong economic growth, resource revenues and relatively favourable debt conditions.
A Remarkable Economic Transformation
Guyana’s recent economic performance represents one of the most dramatic growth stories in the Caribbean and Latin America.
The combination of expanding oil production, rising non-oil activity, lower unemployment and reduced debt-service pressure has transformed the country’s economic position within only a few years.
The major challenge now is to convert this exceptional period of resource-driven growth into sustainable and diversified development.
If Guyana can use its petroleum revenues to strengthen infrastructure, human capital and non-oil industries while maintaining prudent fiscal management, the current economic boom could have effects extending well beyond the country’s oil sector.
Source: Inter-American Development Bank, Caribbean Economics Quarterly, August 2026.
