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- GDP (PPP):
- $6.2 billion
- 3.3% growth
- 3.7% 5-year compound annual growth
- $7,939 per capita
- Inflation (CPI):
- FDI Inflow:
Guyana’s economic freedom score is 55.7, making its economy the 121st freest in the 2014 Index. Its overall score is 1.9 points higher than last year, reflecting notable score increases in control of government spending and investment freedom. Guyana is ranked 22nd out of 29 countries in the South and Central America/Caribbean region, and its overall score is well below the world and regional averages.
Over the 20-year history of the Index, Guyana has advanced its economic freedom score by 10 points. This overall increase has been achieved by enhancements in seven of the 10 economic freedoms, notably the management of public spending, freedom from corruption, and monetary freedom, the scores for which have improved by 10 points or more.
Guyana slipped back into economically “repressed” status during the late 2000s but has risen out of that category since 2012 and recorded its highest score in eight years in the 2014 Index. Nevertheless, broad-based economic growth continues to be held back by institutional weaknesses in the economy. Long-standing constraints on economic freedom include fragile protection of property rights and below-average levels of openness and integration into world markets.
Since independence in 1966, Guyana has been ruled mostly by left-wing populist governments. President Donald Ramotar was elected in 2011. Reform has been attempted only under framework agreements with international organizations. Although the risk of political violence is the lowest since the early 1990s, relations between the ruling People’s Progressive Party/Civic and the People’s National Congress/Reform remain hostile. Guyana is one of the Western Hemisphere’s poorest countries, and its state-dominated economy, dependent mainly on agriculture and mining, has been stagnant for many years. The economy relies heavily on exports of sugar, gold, bauxite, shrimp, timber, and rice, which represent nearly 60 percent of GDP and are susceptible to weather conditions and fluctuations in commodity prices. Violent crime and drug trafficking are endemic.
Guyana is a transshipment point for South American cocaine destined for North America and Europe, and counter-narcotics efforts are undermined by corruption that reaches into high levels of the government. Crime is a major problem. The judicial system is generally perceived as slow and ineffective in enforcing contracts or resolving disputes. Protection of property rights is insufficient.
Guyana’s top individual income tax rate is 33.3 percent, and its top corporate tax rate is 40 percent. Other taxes include a property tax and a value-added tax (VAT). The overall tax burden equals 21.2 percent of gross domestic income. Government spending remains around 30 percent of GDP. Public debt is around 60 percent of GDP.
The overall pace of regulatory reform has lagged behind other countries. With no minimum capital required, launching a business takes eight procedures and 20 days. Licensing takes about 200 days. The labor market is underdeveloped, and many rely on the informal sector for employment. The government influences prices through state-owned enterprises but has reduced subsidies for electricity and transportation significantly.
Guyana’s average tariff rate is 6.5 percent. Political unrest has been a deterrent to foreign investment. The financial sector is small and underdeveloped. Banking remains plagued by inefficiency and a poor financial regulatory framework. High credit costs and scarce access to financing remain barriers to generating more dynamic entrepreneurial activity.