Highlight 16/2026: To What Extent Has Oil Production Affected the Performance and Competitiveness of Guyana’s Non-Oil Sector?
Karmelita Deonarine, 25 May 2026
Since the commencement of oil production in 2019, Guyana has experienced unprecedented economic growth, with average annual GDP growth exceeding 40 percent since 2020, effectively tripling the size of the economy. According to the International Monetary Fund (IMF) and the World Bank, Guyana is now among the fastest-growing economies globally. While this represents a remarkable development achievement, a key concern is whether rapid oil windfalls could undermine the performance and competitiveness of the non-oil sector, particularly agriculture and manufacturing, through dynamics associated with Dutch disease.
The Government of Guyana has been deliberate in its policy to mitigate these risks. Central to this strategy was the early establishment of a sovereign wealth fund, the Natural Resource Fund (NRF), prior to the commencement of oil production. Beyond this, the government has pursued a strategy of front-loaded public investment, using oil revenues to address structural constraints in energy, infrastructure, agriculture, and human capital, with the aim of enhancing productivity and competitiveness in the non-oil economy.
The impact of this approach is reflected in the continued expansion of the non-oil sector alongside the oil economy. While the non-oil sector contracted by 7.3 percent in 2020 due to the combined effects of the COVID-19 pandemic and domestic electoral uncertainty, it rebounded strongly thereafter, growing by 4.6 percent in 2021, 11.5 percent in 2022, 11.7 percent in 2023, 13.1 percent in 2024, and an estimated 14.3 percent in 2025.
Sectoral performance reinforces this trend. Traditional sectors such as agriculture, forestry, and fisheries recorded consistent growth between 2022 and 2025, expanding by 11.9 percent in 2022, 7.0 percent in 2023, 11.0 percent in 2024, and an estimated 11.5 percent in 2025, despite weather-related shocks. Bauxite production also recovered strongly, rebounding by 48.4 percent in 2024 and 53.4 percent in 2025 following earlier volatility.
Non-traditional sectors have expanded even more rapidly. Manufacturing accelerated from a modest growth of 3.5 percent in 2021 and 3.9 percent in 2022 to 25 percent in 2023 and an estimated 20 percent in 2025. The services sector maintained steady growth of over 7 percent annually, while construction grew consistently above 25 percent since 2021, driven by large-scale infrastructure investment.[1] Together, these trends suggest that oil revenues have supported, rather than displaced, activity in non-oil sectors.
Labour market outcomes further support this trend. Employment rates increased from 87.2 percent in 2020 to 93.2 percent in 2024, with the largest shares in wholesale and retail trade (14.8 percent), construction (12.5 percent), and agriculture (10.3 percent). Notably, the oil sector is not among the major employer, indicating that labour has not been significantly reallocated away from other sectors—a key mechanism of Dutch disease.
Given the scale of Guyana’s oil reserves, estimated at approximately 11.2 billion barrels and its high global demand, oil exports now dominate Guyana’s external sector, accounting for approximately US$17.8 billion, or nearly 89 percent of total exports. However, non-oil exports have remained resilient in absolute terms, reaching an estimated US$2.3 billion in 2025. In particular, gold and bauxite exports increased by 63.4 percent and 52 percent respectively, reflecting continued performance in traditional export sectors.
Naturally, overall oil production has significantly reshaped Guyana’s economic structure, particularly through export concentration. However, it has not undermined the performance or competitiveness of the non-oil sector. Instead, the evidence points to broad-based expansion across sectors. Nonetheless, Guyana must remain vigilant to the risks of Dutch disease, particularly under an expansionary fiscal stance that could increase inflation and weaken non-oil sector competitiveness. Continued policy discipline is essential for long-term diversification.
[1] Author’s analysis based on data from the following publications: Bank of Guyana 2020 Annual Report, Bank of Guyana 2021 Annual Report, Bank of Guyana 2022 Annual Report, Bank of Guyana 2023 Annual Report, Bank of Guyana 2024 Annual Report, Guyana’s 2026 Budget Speech delivered by the Honourable Dr. Ashni K. Singh, M.P. Senior Minister in the Office of the President with Responsibility for Finance.
Karmelita Deonarine, Highlight 16/2026: To What Extent Has Oil Production Affected the Performance and Competitiveness of Guyana’s Non-Oil Sector?, 25 May 2026, available at www.meig.ch
The views expressed in the MEIG Highlights are personal to the authors and neither reflect the positions of the MEIG Programme nor those of the University of Geneva