Strong 2025 Growth Sets Stage for “Putting People First” Budget- Ram and McRae

Guyana’s Budget 2026, presented under the theme “Putting People First,” outlines a wide range of fiscal, social and economic measures, while reporting economic performance in 2025 that exceeded initial projections, according to a release from Ram and McRae.

The release said overall GDP growth in 2025 reached 19.3 per cent, well above the projected 10.6 per cent, while non-oil growth stood at 14.3 per cent compared with a forecast of 13.8 per cent. Inflation was recorded at 2.5 per cent, below the target of 2.8 per cent. Current revenue increased by $209 billion to $993.6 billion, representing a rise of 21.03 per cent.

Non-interest current expenditure amounted to $604 billion, while interest expenditure rose to $23.4 billion. Capital expenditure reached $684.9 billion, and the overall fiscal deficit declined by $59.7 billion, or 14.9 per cent, to $340.5 billion. The balance of payments recorded a surplus of US$338.2 million, with merchandise exports of $20.1 billion and imports of $10.3 billion.

For 2026, overall real GDP growth is projected at 16.2 per cent, with the non-oil economy expected to grow by 10.8 per cent. Inflation is projected at 2.5 per cent, while current revenue is forecast to rise to $1.067 trillion, an increase of 4.1 per cent over 2025. Non-interest current expenditure is projected at $739.8 billion, interest expenditure at $34.7 billion, and capital expenditure at $779.6 billion. The overall fiscal deficit is projected to increase to $392.3 billion, while the balance of payments surplus is expected to narrow to US$151.3 million. Merchandise exports are projected at $20.5 billion, with imports of $11.7 billion.

The release outlined several measures aimed at promoting productive activity and economic diversification, including the designation of Special Development Zones with fiscal incentives, the removal of corporate income tax on agriculture and agro-processing businesses, and the expansion of export allowances to include value-added timber products. VAT will be removed on locally made furniture and locally produced jewellery, the 14-day residency requirement for destination weddings will be abolished, and duty and VAT will be removed on security equipment.

In the area of financial empowerment, the government plans to establish a Guyana Development Bank, initially capitalized at US$100 million, and introduce a co-investment model to share financial risks with commercial banks while offering preferential interest rates.

Measures to reduce the cost of home ownership include increasing the low-income mortgage ceiling from $20 million to $30 million, extending the ceiling to insurance companies, and providing $7.5 billion for a housing improvement subsidy. To lower the cost of vehicle ownership, double-cab pickups will now be subject to flat taxes, VAT will be removed on vehicles below 1500cc and on hybrid vehicles below 2000cc, and all duties and taxes will be removed on all-terrain vehicles and outboard engines up to 150 horsepower.

To ease the cost of living, the release said the zero-rated excise tax on petroleum products will continue, pre-pandemic freight charges for the calculation of import taxes will be extended until December 31, 2026, and $9 billion has been allocated for additional cost-of-living interventions.

Measures supporting vulnerable groups include an increase in the Because We Care Grant from $50,000 to $60,000 per child, the introduction of an annual $20,000 transportation grant per school child, and the continued payment by the state for up to eight CSEC and CAPE subjects per student. Old-age pension will increase from $41,000 to $46,000 per month, along with the introduction of an annual $20,000 transportation grant for pensioners, while public assistance will rise from $22,000 to $25,000 per month. Corporate income tax will be removed for providers of child-care and elderly-care services, and $1.5 billion has been allocated for co-investment in child-care and elderly-care facilities, subject to capped service rates.

Employment and income support measures include increasing monthly stipends from $40,000 to $50,000 for Pathway Workers, Community Enhancement Workers, Community Service Officers and Community Policing Groups, as well as the introduction of a national cash grant of $100,000 to every Guyanese citizen aged 18 years and over.

Tax measures affecting individuals include the abolition of net property tax from the 2026 year of assessment and an increase in the monthly income tax threshold from $130,000 to $140,000.

According to Ram and McRae, Budget 2026 will be financed with no new taxes, with approximately US$2.374 billion to be withdrawn from the Natural Resource Fund to finance the programme.