Dear Editor,
Oil prices are forecasted to drop further in the coming year from a high of $81/bbl in 2024 to $60/bbl in 2026 after a decline this year that saw an average of $68/bbl. The World Bank’s energy price index forecasts a 10% decline in 2026 (Reference: World Bank Commodity Market Report, October 2025). This reflects slower global economic growth and an oversupply of oil in the market. Given that OPEC has decided to remove production cuts to oil production and the pending regime change in Venezuela, one can expect Venezuelan oil production to come back online, further increasing global oil supply and resulting in lower crude oil prices.
Although efforts have been made to diversify our economy, the reality is that our dependence on the oil sector continues to increase and our increased spending has been fueled by a depletion of our Natural Resource Fund (NRF) and debt.
Going forward we must pursue a balanced budget and reduce our debt burden. Rich economies are also faced with a debt burden that could trigger a global debt crisis, and we must cater for a further reduction in global demand and global economic growth. The prudent decision would be to cut spending, increase savings, and strengthen our buying capacity by also leveraging the strong gold market via improved currency and gold reserves. A stronger Guyana dollar will help support increased buying power as first and second world buying power face risks of being reduced.
Our path for future economic development must be strategic, measured, and deliberate. We must limit our spending to critical areas in need of improvement and improve our ability to leverage the booming gold market. Whether it be via increased taxes or increased royalties, the opportunity to reduce the cost of imports which support critical infrastructure projects and the current construction development in the housing sector, we can achieve the desired cost savings without a further reduction in our NRF and increased reliance on debt.
Minister Singh, who is currently managing the nation’s purse, must show the nation that he is capable of astutely guiding our economy towards a position of improved fiscal management and stronger economic performance during the forecasted period of global slow down. The opportunity for our Nation to excel in establishing a sustainable fiscal policy is before us and we must not let this opportunity pass due to overspending and poor investment returns on the funds available. The forecasted weaker oil sector will show us whether the current administration is capable of making the correct economic development decisions.
Norway rose to the occasion and performed exceptionally well. They have enriched their citizens for the long term. Guyana must also rise to the occasion and accomplish strong long term economic growth rooted in a wealth fund that can endure, thrive, and absorb future economic shocks. Our ability to correctly manage our nation’s development will make the difference in our nation’s transformation. It must be sustainable and for the better.