Revenue Growth to Outpace Spending Increases In Guyana In 2022

• Guyana’s fiscal deficit will narrow over the coming quarters, from an estimated 4.7% of GDP in 2021 to 3.5% in 2022, due to booming revenues from the oil sector and stronger economic activity. 
• In 2020, the budget deficit widened to 5.8%, from an average shortfall of 2.3% from 2015-2019, as revenues from the non-oil sector declined and the government enacted countercyclical measures to support household incomes. 
• That being said, rebounding economic activity drove a 21.2% y-o-y increase in total revenues in H121, largely because of a 20.8% increase in tax revenue, which outpaced expenditure growth of 16.5% in the first half of the year.  
• Fitch Solutions expect the Guyanese government will increase public expenditures to finance investment and strengthen public services, which will keep the budget in deficit in the medium term. 
• Public debt is forecast to decrease to 37.5% of GDP in 2022, from an estimated peak of 38.1% in 2021, and continue to fall in the longer term as the government runs smaller deficits and the economy continues to grow robustly. 

 

(Source: Fitch Solutions)