Two red flags from the Mid-Year Report — Keith Bernard — Opinion

Two red flags from the Mid-Year Report

September 23, 2026·3 min read

Published in

Kiskadee Watch ·Sep 23, 2026

Dear Editor,

Guyana’s 2026 Mid-Year Report^[1] gives us plenty to celebrate: GDP is soaring, oil production is booming, and the economic numbers look so good that even the calculator might need a vacation.

But beneath the champagne bubbles are two red flags waving rather enthusiastically.

Red flag number one: the debt is growing too. Public and Publicly Guaranteed debt has climbed to about US$8.57 billion, with more borrowing expected. Of course, when GDP is growing at spectacular rates, debt can look relatively harmless. It is rather like adding more luggage to a speeding car, the speedometer makes everything look fine until the road gets rough.

The sensible response is fiscal discipline: control recurrent spending, prioritize investments that generate economic returns, extend debt maturities and protect fiscal space. In other words, don’t spend tomorrow’s oil money today simply because today’s oil money arrived early.

But here comes the political complication. These economically sensible measures may carry a substantial political cost. Fiscal restraint could mean reducing or delaying popular projects, limiting the growth of public-sector spending and resisting demands for immediate benefits from oil revenues. The opposition could portray such measures as denying citizens their rightful share of the country’s newfound wealth. The government, therefore, may find visible spending and additional borrowing politically easier than explaining why some of today’s oil wealth must be saved for tomorrow.

Red flag number two: the oil money has a remarkable ability to travel. Guyana is exporting billions in petroleum, but significant funds also flow back out through foreign investment, profit repatriation and petroleum-related costs. Meanwhile, some non-oil sectors remain vulnerable.

So we have the classic development dilemma: GDP is growing at spectacular speed, while the economy is still trying to figure out how much of that wealth is actually staying home.

The recommended response, saving more oil revenue, strengthening local content, promoting diversification and directing funds toward productive investment, may also face political resistance. These measures take time to produce results, while voters and opposition parties can reasonably demand immediate improvements in wages, infrastructure and public services. The temptation is therefore to spend the oil windfall quickly rather than invest it in projects whose benefits may only become visible years from now.

That is where the potential Hobson’s choice appears. Continue spending heavily and risk greater debt and dependence, or exercise fiscal restraint and risk slowing the party while handing the opposition an easy political talking point. Neither is particularly comfortable.

But Guyana does not actually have to choose between those two extremes. There is a third option: use the oil boom to build an economy that eventually needs the oil less.

That means saving part of the windfall, investing in infrastructure and human capital, strengthening agriculture and agro-processing, expanding local content and creating industries that generate value beyond the oil fields. It also means explaining clearly to citizens why some oil wealth must be converted into long-term productive assets rather than consumed immediately.

The real political test is therefore whether sound economics can survive the demands of short-term politics. Fiscal discipline may be economically prudent but politically painful; unrestricted spending may be politically attractive but fiscally risky. The government’s challenge is to make the long-term case for restraint, transparency and diversification before the oil boom makes the short-term option too comfortable to resist.

Because the real economic question isn’t how much oil are we producing?

It is how much of the wealth remains in Guyana after the oil money leaves the well?

If the answer is not enough, then today’s spectacular growth could become tomorrow’s very expensive history lesson.

Sincerely,
Keith Bernard

References

Household relief boosted as food, energy costs climb – 2026 Mid-Year Report – Department of Public Information, Guyana — dpi.gov.gy ↩

Published in

Kiskadee Watch ·Sep 23, 2026

Household relief boosted as food, energy costs climb – 2026 Mid-Year Report – Department of Public Information, Guyana

dpi.gov.gy · 2026-09-14

Household relief boosted as food, energy costs climb – 2026 Mid-Year Report – Department of Public Information, Guyana ... # Household relief boosted as food, energy costs climb – 2026 Mid-Year Report ... September 14, 2026 ... The government has expanded cash grants, subsidies and publicly funded services as rising food and energy prices put pressure on households, even as the country’s oil-driven economy continues its rapid growth. ... Consumer prices rose 4.4 per cent in the first six months of 2026, according to the government’s Mid-Year Report. Food prices increased 6.7 per cent and accounted for most of the overall rise. The 12-month inflation rate stood at 4 per cent in June. ... The report attributed the increase to imported inflation, stronger demand for food, retail mark-ups and unfavourable weather, while saying government measures had helped prevent sharper increases. ... “Government has ensured cash support to farmers, parents of school-age children, and every Guyanese over 18 years old to cushion the effect of increased costs, and to increase disposable income,” the report said. ... The largest initiative is a $100,000 cash grant for Guyanese aged 18 and older. Distribution began in March, with $42.5 billion spent during the first half of the year. ... The government also increased Old Age Pension payments to $46,000 a month from $41,000 and Public Assistance to $25,000 from $22,000. More than 30,000 people with disabilities received the higher Public Assistance payment. ... More than ... 6,0 ... 85,000 each through ... allowance and a new ... up from a combined ... 0 previously. ... Housing remained another major area of spending. The government ... $89.9 billion of the $159.1 billion allocated for affordable housing and distributed 3,245 ... lots, most to ... - and moderate-income households. ... The PPP/C government also sought to contain energy costs by keeping electricity tariffs stable and maintaining a zero per cent excise tax on petroleum products, limiting the effect of higher global oil prices on consumers. ... Crude oil averaged US$92.50 a barrel during the first six months of 2026, nearly 29 per cent higher than a year earlier. ... Food affordability measures included direct assistance to rice farmers. The PPP/C government paid $2.8 billion to 5,106 farmers covering nearly 235,000 acres, alongside programmes intended to increase agricultural production and improve yields. ... The spending comes as Guyana continues to record extraordinary economic growth fuelled by its expanding petroleum industry. The economy grew an estimated 33.3 per cent in the first half of 2026, while the non-oil economy expanded 10.1 per cent. ... But the government said global commodity volatility, supply-chain disruptions and elevated food and energy prices remained risks to household purchasing power. ... “Government will continue to implement targeted interventions to contain cost of living pressures,” the report said.