Guyanese Government To Implement Fiscal Stimulus Amid Tense Political Landscape

• Guyanese President Irfaan Ali will use the country's revenue windfall from crude oil production to increase social spending and public investment in the coming quarters, which may bolster support for his People’s Progressive Party/Civic (PPP).
• Since taking office, Ali’s administration has largely focused on increasing public expenditures in budgetary proceedings and overseeing the country’s COVID-19 response, as the previous government could not enact significant fiscal stimulus in 2020.
• The PPP passed a GYD383.0Bn (USD1.8Bn) annual budget in March 2021. This budget, which increases public spending by 16.1% y-o-y from the emergency GYD330.Bn 2020 budget, enacted in September, passed on a straight-line party vote.
• However, ongoing tensions between the PPP and the opposition A Partnership for National Unity and Alliance for Change coalition will persist, driving political polarization and preventing bipartisan policymaking. That said, Fitch Solutions gives Guyana a score of 54.4 of out 100 in its Short-Term Political Risk Index (STPRI), which places it 24th out of 26 markets in the Caribbean, largely due to low 'social stability' scores.

(Source: Fitch Solutions)