Guyana’s macro-economic policies are delivering results  – Guyana Chronicle

–President Ali points to several indicators, says Guyanese paying 8.1 per cent less tax on every dollar 

GUYANESE are paying 8.1 per cent less tax on every dollar earned today compared to 2020, according to President Irfaan Ali, who, on Thursday, positioned the country’s 2026 National Budget as the latest step in a broader strategy to “shock-proof” and “future-proof” the national economy.

Examining the performance of the economy, President Ali said the effective tax rate, tax as a share of Gross Domestic Product (GDP) has fallen from 14.5 per cent in 2020 to 6.4 per cent in 2025, reflecting what he described as a more “people-oriented” and “predictable” tax system designed to spur investment and broaden opportunities.

“This is the average amount of tax paid on every dollar earned as income,” he explained adding, “We are paying less tax on every dollar or for that matter, Guyanese are paying almost 8.1 per cent less tax on every dollar when compared to 2020.”

The lower tax burden he said is part of a wider package of fiscal and structural reforms that, he noted, has strengthened Guyana’s resilience to global shocks while spreading the benefits of rapid growth more fairly across society.

Citing the Fragility State Index, a global annual ranking that measures how vulnerable a country is to instability, President Ali said Guyana’s scores have improved significantly between 2019 and 2025 across several key dimensions, including security, political stability, economic performance, and human capital.

He noted that the security apparatus score improved from 13 in 2019 to six in 2025, reflecting in his view, stronger institutions, and a greater ability to manage internal and external security pressures without tipping into instability.

The factionalised elite’s indicator declined from 11 to five, which he said points to reduced power struggles and a more equitable political and economic environment.

The economy score dropped 10 to five, signalling greater stability, better capacity to withstand external shocks, and increased wealth and job creation.

Economic inequality fell from 9 to around 4.5, which he interpreted as evidence that growth is “fairer and more equitable, benefitting all, irrespective of race, ethnicity or religion”.

The human flight and brain drain indicator dropped sharply from 16 in 2019 to about 7 in 2025, which indicates that fewer skilled Guyanese are leaving and that capital flight has eased as investor confidence returns.
These international indicators he said validates the impact of what he termed successive People’s Progressive Party/Civic (PPP/C) budgets that unlocked development, enhanced competitiveness, and built credibility in the global economy.

ECONOMIC INDEX 
Turning to the Index of Economic Freedom, President Ali said Guyana has made “tremendous” strides in making it easier for people and businesses to produce, trade, invest and build wealth.

He highlighted improvements in government integrity, with the score rising from 20 to almost 80, which he linked to better transparency, procurement systems, and judicial effectiveness.

The tax burden indicator, where Guyana’s score has increased reflects what he described as lower, more moderate and broad-based taxes.

 

“The increase in this point means that there is less tax burden. Our taxes are more moderate, broad- based and predictable, and this is important for investment. So, when we give all of these tax incentive that is how we have seen tremendous improvement in this indicator. We have a more predictable taxation system that is less dependent on human biases.”

He added: “We have a taxation system that is people oriented, people driven, that is moderate, that is broad-based, that is predictable, that investors can trust, that a system can trust. And then, of course, we have government spending, the increase in government spending is directly correlated with the efficiency that we have seen in the system, the growth in the system and the improvement in the system, and this investment in government spending is leading to more efficient and sustainable results with better value for money.”

EXCEPTIONAL GROWTH 
President Ali contrasted Guyana’s performance with global trends, noting that world economic growth averaged about 3.3 per cent in 2025, with advanced economies at 1.7 per cent and developing economies at 4.4 per cent. In Latin America and the Caribbean, he said, average growth stood at 2.4 per cent.

By comparison, Guyana recorded real GDP growth of 19.3 per cent in 2025, which he described as almost six times the global average, more than 11 times the average in advanced economies; more than eight times the regional average in Latin America and the Caribbean and  the non-oil GDP grew by 14.3 per cent, with notable expansions in agriculture  which is  up 11.5 per cent, bauxite with a growth of  53.4 per cent, gold and other mining  which are up 11.6 per cent and 28.9 per cent respectively.

Meanwhile, manufacturing, construction and financial services are up by 20 per cent, 31 per cent and 16.9 per cent respectively, while professional, scientific and technical services are up 35.7 per cent.

“That is because we are investing in the building out of human capacity and capability, the local content legislation, the local content policy that is now delivering results,” the President said adding:
“This speaks to structural resilience. This speaks to structural transformation in our economy. And the results are there for us to see the development…the future proofing of our economy is being achieved …through the successive budgets and the policy making framework.”

ROBUST BANKING SECTOR
The President also pointed to sustained improvements in the banking and financial sector; the balance of market securities climbed from $94 billion in 2020 to $168 billion in 2025, an increase of 78.7 per cent.

International reserves in 2025 stood at almost US$668 million above 2020 levels.

The capital adequacy ratio reached 16.36 per cent at the end of September 2025 more than double the 8 per cent prudential benchmark indicating that banks have sufficient capital to absorb shocks.

Non-performing loans fell from 11.1 per cent in 2019 to 1.42 per cent, suggesting borrowers are better able to service their debt.

“When you look at these indicators, it tells you a story that we have a solid and robust financial framework with the fundamentals in place to strengthen our economy, safeguard our economy, and shock proof our economy, making it more resilient; an increase in government deposit provides greater fiscal space to deliver on our commitment,” the President said.