Guyanese Fiscal Deficit Will Narrow In Coming Years Despite Elevated Public Spending

• The Guyanese government's fiscal deficit will narrow to 4.7% of GDP in 2021, from 5.8% in 2020, due to accelerating public revenue growth.  
• While the country’s oil boom underpinned 43.5% real GDP growth in 2020, depressed economic activity in the non-oil sector caused total revenues to contract 6.9%. In addition, the price of Brent crude oil fell below pre-COVID-19 levels throughout much of the year, limiting the government’s intake from oil sales. 
• In 2021, broadening economic growth and higher energy prices will drive revenue growth and help shrink the budget shortfall. Notwithstanding, President Irfaan Ali will likely sustain higher public spending levels in the short-to-medium term, which will keep the budget balance in deficit despite the revenue-positive tailwinds.

(Source: Fitch Solutions)