President Dr. Irfaan Ali has pushed back against critics who claim Guyana’s rapid growth is being driven mainly by government spending, arguing the view reflects a “fundamental misunderstanding” of how the economy and Gross Domestic Product (GDP).
In a public address on government expenditure, President Ali said State spending is designed to improve services, create jobs, strengthen resilience, and expand opportunities for families across the country, but insisted it cannot “artificially” inflate non-oil economic performance without real production.
“GDP measures production, not payment. Let me be clear on that. GDP measures production, not payment,” the President said, contending that non-oil GDP growth occurs because businesses and productive sectors are generating more output.
He explained that non-oil GDP captures value added in sectors such as construction, manufacturing, agriculture, services, transport and trade, not the act of government spending itself.
“Government spending is not a production sector. It does not appear in GDP unless a contractor builds, a supplier produces, a worker is employed, or a service is delivered,” Ali said.
The Head of State argued that the real test is whether public spending is translating into higher productivity, particularly through capital investments that support long-term structural changes, while recurrent spending is used to ease short-term pressures on households.
President Ali pointed to grants and support programmes as part of recurrent expenditure, describing them as measures that increase disposable income, reduce cost-of-living pressures and provide in-kind assistance, including support for farmers and children.
He also cited the Bharrat Jagdeo River Bridge as an example of how capital expenditure can boost productivity and reduce the cost of doing business. According to Ali, commuters are saving time and fuel, improving efficiency, and enabling heavier and more efficient transportation, outcomes he said support broader economic expansion.
“Every single commuter is now saving time… saving fuel, increasing productivity… All of that leads to expansion in productivity as a result of this capital expenditure that the government invested in,” he said.
Citing official performance trends, Ali said the country’s growth over the past five years has been driven by expansion in both the oil and non-oil sectors. He noted that non-oil GDP growth increased from 4.6% in 2021 to 14.3% in 2025, averaging about 13% between 2022 and 2025. He added that in 2025, non-oil sectors accounted for nearly 20% of the economy’s overall growth.
Ali further pointed to investments such as hinterland roads, arguing that infrastructure spending improves access for miners and foresters, increases production, creates jobs and encourages investment.
He dismissed the opposing narrative as politically driven, describing it as “false” and “comical,” and said it was important for citizens and the international community to understand the economic reality.
“It’s important for investors… and the global community to understand the realities because confidence in our economy leads to confidence in investment and continued expansion in our economy,” the President said.
