Guyana Fiscal Deficit To Widen In 2023 Before Flipping To Surplus In 2024

• Fitch Solutions forecast Guyana’s fiscal deficit will widen from 2.2% of GDP in 2022 to 3.0% in 2023 given the government’s planned 41.4% increase in headline expenditure over the year.
• While this suggests a slight deterioration in the market’s fiscal trajectory, Fitch notes that the projected deficit remains comfortably below both the 5-year and 10-year historical average deficits of 5.0% and 4.3%, respectively.
• The successful offshore oil field explorations and developments in Guyana in recent years have prompted the government to increase headline expenditure by double-digit growth rates since 2019, and 2023 will be no exception to this trend.
• Nonetheless, Oil revenues will record large gains in the medium term as production continues to rise amid stabilising prices, suggesting that Guyana will hit its first surplus in Fitch’s records by 2024.
• Overall, Fitch sees limited risks to Guyana’s medium-term fiscal trajectory due to persistent surpluses and a low debt-to-GDP ratio (24.6% in 2022 and averaging 25.6% between 2023 and 2027).

(Source: Fitch Solutions)