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- GDP (PPP):
- $5.5 billion
- 3.8% growth
- 4.7% 5-year compound annual growth
- $6,895 per capita
- Inflation (CPI):
- FDI Inflow:
Guyana’s policy failures and structural inadequacies continue to hinder broad-based economic growth. Efforts to improve the management of public finance have had little impact, and the inefficient public sector remains a serious drag on private-sector development. Mining revenue has sustained average annual growth rates of close to 5 percent for the past five years.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 55.4 (down 0.1 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 127th
- Regional Ranking: 22nd in the South and Central America/Caribbean Region
- Notable Successes: Monetary Freedom and Trade Freedom
- Concerns: Rule of Law, Investment Freedom, and Financial Freedom
- Overall Score Change Since 2012: +4.1
Long-standing constraints on Guyana’s economic freedom include widespread government corruption and fragile protection of property rights under the weak rule of law. Restrictions on new investment and the lack of access to long-term financing are significant impediments to business development and job growth.
In the first change of government in 23 years, a multiracial coalition of the Partnership for National Unity and the Alliance for Change led by David Granger won 50.3 percent of the votes in the 2015 election. Granger took office as president on May 16 and will face huge difficulties in implementing his agenda. Although the risk of political violence is low, relations between the new government and the formerly ruling Indo-Guyanese PPC/Civic parties remain strained. Exports of sugar, gold, bauxite, shrimp, timber, and rice represent nearly 60 percent of formal GDP. Violent crime and drug trafficking are endemic.
Voters who elected a new government in May 2015 were fed up with organized criminal activity, narco-trafficking, human trafficking, gun violence, and corruption. Violent crime is a major problem. Guyana is a transit point for cocaine destined for North America and Europe. The judicial system is generally perceived as slow and ineffective in enforcing contracts or resolving disputes. Protection of property rights is insufficient.
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 20.6 percent of total domestic income. Government spending amounts to 29.9 percent of total domestic output. The budget balance is in deficit, and public debt has climbed to over 65 percent of total domestic output.
The overall pace of regulatory reform continues to lag behind that of other countries. Licensing still consumes about 100 days. The labor market remains underdeveloped, and many rely on the informal sector for employment. Although a request to increase regulated telecom prices was rejected and state-administered fuel prices were cut in 2015, electricity subsidies were increased in 2014, and sugar subsidies remain high.
Guyana has an average tariff rate of 7.1 percent and is a member of the Caribbean Community and Common Market. Some imports require licenses. Foreign investment in the mining sector is restricted. Otherwise, foreign and domestic investors are treated equally under the law. Banking remains plagued by inefficiency and a poor financial regulatory framework.