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- GDP (PPP):
- $5.8 billion
- 3.0% growth
- 4.5% 5-year compound annual growth
- $7,509 per capita
- Inflation (CPI):
- FDI Inflow:
Broad-based economic growth in Guyana is held back by structural weaknesses in the economy. Long-standing constraints on economic freedom include widespread corruption in government, fragile protection of property rights, and weak rule of law. Inefficient bureaucracy and significant restrictions on foreign investment continue to undermine the entrepreneurial environment.
Guyana’s oversized government is an impediment to private-sector development and the achievement of sustained economic growth. Actions to improve the transparency and quality of its management of public finances have yielded mixed results. The average tariff rate has gradually decreased, but nontariff barriers continue to limit trade freedom.
Originally a Dutch colony, Guyana had become a British possession by 1815. The abolition of slavery led to settlement of urban areas by former slaves and the importation of indentured servants from India to work the sugar plantations. The resulting ethno-cultural divide has persisted and has led to political turbulence. Since gaining independence in 1966, Guyana has been ruled mostly by socialist-oriented governments. A multiracial coalition government led by President David Granger was elected in 2015. Political tensions between the coalition government and the formerly ruling Indo-Guyanese PPC/Civic parties eased slightly following successful local elections in March 2016. Exports of sugar, gold, bauxite, shrimp, timber, and rice represent nearly 60 percent of formal GDP.
Guyana’s property rights system is overly bureaucratic and complex, with regulations that are overlapping and competing, overloaded, and nontransparent. The judicial system is generally perceived as slow and ineffective in enforcing contracts or resolving disputes. There is a widespread public perception of corruption involving officials at all levels, including the police and the judiciary.
The top personal income tax rate is 33.3 percent, and the top corporate tax rate is 40 percent. Other taxes include a property tax and a value-added tax. The overall tax burden equals 22.1 percent of total domestic income. Government spending has amounted to 30.1 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.0 percent of GDP. Public debt is equivalent to 48.8 percent of GDP.
Enforcement of existing regulations is not always consistent, and a lack of regulatory certainty often increases the cost of doing business. Labor regulations are relatively flexible, but the size of the public sector has prevented the emergence of an efficient labor market. Government-subsidized rice used to be sold to Venezuela for rates that were higher than market rates, but by 2016, Venezuela could no longer afford to buy it.
Trade is extremely important to Guyana’s economy; the value of exports and imports taken together equals 121 percent of GDP. The average applied tariff rate is 7.1 percent. In general, foreign and domestic investors are treated equally under the law. The underdeveloped financial sector continues to suffer from a poor institutional framework. Scarce access to financing remains a barrier to more dynamic entrepreneurial activity.