President Ali rejects spending-led growth narrative

President Dr Mohamed Irfaan Ali on Wednesday morning pushed back sharply against claims that Guyana’s rapid economic growth has been driven largely by government spending, saying such arguments misrepresent how economic output is calculated and obscure the role of private-sector activity.

Addressing the criticism, Dr Ali said growth in the non-oil economy reflects higher levels of production across a range of industries rather than an expansion of public expenditure.

“GDP measures production, not payment. If non-oil, GDP is growing. It is because businesses are producing more, not because the government is spending more,” he said.

The president claimed that critics are spreading politically motivated stories without a basis in economic facts. He described them as “parrots,” stating that their arguments lack facts, understanding of reality, or knowledge about how the economy, systems, and government function.

“Now the parrots will continue. The parrots have their political agenda, but it is important for us as a people to understand the reality, appreciate the reality,” the president said.

Dr Ali said public spending alone does not count toward gross domestic product unless it results in concrete economic activity.

“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,” he said.

He distinguished between capital investment and recurrent expenditure, arguing that long-term infrastructure projects are designed to reshape the economy by improving efficiency and lowering operating costs. Among the projects he cited were the Bharrat Jagdeo Demerara Harbour Bridge and the expansion of roads in the hinterland, which he said have reduced travel times and logistical constraints.

“Saving time is saving money,” the president said, adding that better infrastructure enables businesses to transport goods more efficiently, supporting both growth and employment.

Recurrent spending, he said, serves a different purpose, focusing on immediate relief for households through income support, assistance to farmers and children, and policies aimed at easing cost-of-living pressures.

Official figures cited by President Ali show sustained growth in the non-oil economy, with expansion increasing from 4.6 per cent in 2021 to 14.3 per cent in 2025. Between 2022 and 2025, non-oil growth averaged about 13 per cent, and in 2025 those sectors accounted for nearly one-fifth of total economic expansion, according to government data.

“The view expressed, therefore, by the parrots, that government spending is responsible for economic growth and not the strong performance of the non-oil sector, is therefore not only false, but frankly, comical,” President Ali said.

Warning that misrepresenting the sources of Guyana’s growth could have broader consequences, President Ali said, “It is important for investors, foreign direct 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.”

Despite ongoing criticism, the president said his administration would continue to pursue policies aimed at broad-based development.