GUYANA
STAFF REPORT FOR THE 2018 ARTICLE IV CONSULTATION—DEBT SUSTAINABILITY ANALYSIS
May 31, 2018
Guyana’s risk of external debt distress remains moderate, but debt dynamics will improve markedly with the start of oil production in 2020. The debt sustainability analysis (DSA) update shows that indicators of the risk of external debt distress remain under the relevant thresholds in the baseline.
The PV of external debt-to-GDP is projected to decline to 8 percent over the medium-term while debt service will decrease to 2 percent of revenue.
Stress tests indicate the susceptibility of public debt to adverse shocks before oil revenues place the debt on a downward trajectory. Guyana’s external public debt ratio is sensitive to extreme shocks to exports and to the exchange rate. These shocks cause temporary but significant breaches in the external debt thresholds, prompting a moderate risk rating. Nevertheless, Guyana’s medium- and long-term outlook is very favorable given the projected oil revenues, which will eventually underpin fiscal surpluses and a reduction in external indebtedness.