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- GDP (PPP):
- $5.8 billion
- 4.2% growth
- 4.2% 5-year compound annual growth
- $7,466 per capita
- Inflation (CPI):
- FDI Inflow:
Guyana’s economic freedom score is 53.8, making its economy the 129th freest in the 2013 Index. Its overall score is 2.5 points higher than last year due to notable score increases in labor freedom, 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.
Guyana has registered the second-largest score improvement in the 2013 Index. However, broad-based economic growth is limited by structural and policy inadequacies. Efforts to improve the management of public finances have had little impact, and the large and inefficient public sector continues to be a drag on private-sector development. Mining revenue has sustained average annual growth rates of over 6 percent for the past five years, but questionable practices, particularly in gold mining, have raised environmental concerns.
Other 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.
Support for Guyana’s two major parties is ethnically and racially polarized. Reform has been attempted only under framework agreements with international organizations. In 2006, the People’s Progressive Party–Civic (PPC/C) won the first nonviolent elections in more than 20 years. Although the risk of political violence is the lowest since the early 1990s, relations between the PPC/C and the People’s National Congress–Reform remain hostile. In late 2011, President Donald Ramotar of the PPC/C assumed office with a minority government. 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. Violent crime and drug trafficking are endemic.
Guyana’s judicial system is inefficient, and the rule of law is uneven. The judiciary remains highly vulnerable to political interference, and the protection of property rights is insufficient. Widespread corruption undermines entrepreneurship and diverts resources from productive activity. A top ruling party executive was forced to resign in 2012 after speaking openly to the media about corruption in the government.
The top 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 (VAT). The overall tax burden is equal to 22.3 percent of total domestic income. Government spending is equivalent to 36 percent of total domestic output. The budget balance is in deficit, and public debt has climbed to over 60 percent of total domestic output.
With no minimum capital required, launching a business takes eight procedures and 20 days. However, the overall pace of regulatory reform has lagged behind other countries. Licensing requirements still consume about 200 days. The labor market remains underdeveloped, and many rely on the informal sector for employment. The government influences prices through the regulation of state-owned utilities and enterprises.
The trade-weighted average tariff rate is 6.9 percent, and overall trade freedom is hampered by corruption. The government generally does not discriminate between foreign and domestic investments, but most new foreign investments are screened, and the approval process can be burdensome and non-transparent. Banking remains plagued by inefficiency and a poor financial regulatory framework.