Dear Editor,
The Hon. Minister of Finance, Dr. Ashni Singh, delivered what may be the longest Budget Speech in Guyana’s history. Yet for most Guyanese—especially those operating outside the oil economy—the speech offered more rhetoric than relief. For those in the bottom half of the population, the budget reads less like a plan for shared prosperity and more like an economy designed to reward a narrow, well-connected class.
Buried in the Budget, however, is an admission that explains today’s cost-of-living crisis.
In 2025, Guyana’s money supply grew by 29.4 percent, reaching approximately $1.4 trillion. By contrast, the non-oil economy (where more than 80 percent of Guyanese earn their livelihoods),
expanded by only 14.3 percent. That gap of roughly 15 percentage points is the central driver of rising prices faced by ordinary households.
Put simply, too much money is chasing too few goods.
When government spending, contracts, bank lending, and deposits expand rapidly, but the economy does not produce enough additional food, housing, and services to match that expansion, then prices rise. This is not economic theory—it is the daily reality for families paying more at the supermarket, the fuel pump, and in rent.
Yet the Minister reports an inflation rate of just 2.5 percent at the end of 2025. For households experiencing sharp increases in food prices, rents, and housing costs, this figure does not align with their lived experience. Bank demand deposits and currency in circulation drove a 33.9 percent increase in narrow money, signaling a surge of liquidity that the real economy could not absorb without causing significant increase in prices.
The result is clear: official inflation figures are failing to reflect the real cost pressures facing ordinary Guyanese, particularly those outside the oil sector.
Inflation does not affect everyone equally. It hits hardest those on fixed wages, fixed pensions, and modest incomes. Savings lose value, wages lag behind increases in the prices, and inequality deepens in a country where most citizens do not benefit directly from oil revenues.
At the same time, excess liquidity steered by the PPP to a select few continues to flow into land and housing speculation rather than productive investment. Property prices and rents have surged, placing home ownership further out of reach of the ordinary people. Such a situation is having an adverse social effect of forcing families to overcrowd or sublet simply to survive. Instead of building long-term productive capacity, the rapid expansion in capital in the hands of a select few close to the PPP is chasing short-term gains and thus causing the economy to “overheat”.
In such circumstances, the Bank of Guyana should act decisively to anchor inflation expectations and bring the economy back to the rational middle. However, persistent political influence and interference in their policy mandate has weakened their independence, eroding public confidence in their ability to do their job. When people lose faith in the ability of institutions such as the Central Bank to manage inflation, price increases accelerate and spread.
Guyana is now exhibiting classic signs of an overheating economy: rapid money growth, expanding credit, strong consumer demand, and insufficient growth in productive capacity. When oil revenues soften due to adverse global price movements, these weaknesses will become even more pronounced—and the burden will fall disproportionately on the majority of Guyanese living outside the oil economy and especially on those who are in the bottom 80% of the economy.
Those in the top 20%, with access to political influence, large contracts, and financial buffers will manage. The rest of the country will pay the price. This is way life will be in Guyana unless the PPP changes its ways.
It is not an accident that Mr. Azruddin Mohamed and the WIN Party arrived in Guyana and got 109,000 votes in three short months of campaigning. The real people of Guyana are feeling the pain in the realest of ways. Plus his statement yesterday in reaction to the 2026 Budget was on target and explained quite competently the economic pains of the Guyanese people.