- GDP (PPP):
- $6.3 billion
- 2.1% growth
- 3.5% 5-year compound annual growth
- $8,161 per capita
- Inflation (CPI):
- FDI Inflow:
Guyana’s economic freedom score is 56.8, making its economy the 113th freest in the 2019 Index. Its overall score has decreased by 1.9 points, with declines in labor freedom, investment freedom, and trade freedom outweighing an increase in the score for fiscal health. Guyana is ranked 23rd among 32 countries in the Americas region, and its overall score is below the regional and world averages.
The government is pinning its hopes for economic transformation on an oil boom that is projected to make Guyana the region’s fastest-growing economy in 2020. For the business climate to be improved, however, long-standing constraints on economic freedom such as inefficient bureaucracy, nontransparent procurement, widespread corruption, fragile protection of property rights, and weak rule of law must be removed. The government may jeopardize its healthy balance sheet if it borrows in advance of expected oil revenues to expand public investment to improve the country’s deficient infrastructure.
The abolition of slavery in British Guyana led to urban settlements of former slaves and recruitment of indentured servants from India to work on plantations. The resulting ethno-cultural divide has led to turbulent politics. Endemic violent crime and drug trafficking have been aggravated by the collapse of neighboring Venezuela. Independent since 1966, Guyana has had mostly socialist-oriented governments. President David Granger’s multiracial coalition holds a one-seat legislative majority. Although Granger has pushed for greater transparency and anticorruption reforms, he has been criticized for lack of transparency as his government increases infrastructure spending ahead of an expected windfall from offshore oil reserves. 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. Personnel shortages, delays, and inefficiencies undermine the judicial system. Courts are slow and ineffective in enforcing contracts or resolving disputes. There is a widespread public perception of corruption involving officials at all levels, and compliance with legislation is uneven.
The top personal income tax rate is 33.3 percent, and the top corporate tax rate is 40 percent. Other taxes include property and value-added taxes. The overall tax burden equals 24.4 percent of total domestic income. Over the past three years, government spending has amounted to 32.0 percent of the country’s output (GDP), and budget deficits have averaged 3.3 percent of GDP. Public debt is equivalent to 50.7 percent of GDP.
Enforcement of existing regulations is not always consistent, and a lack of regulatory certainty often increases the cost of doing business. High electricity costs also limit business profits. Labor regulations are relatively flexible, but the size of the public sector has prevented the emergence of an efficient labor market. The government expanded subsidies for electricity, transportation, and water in 2018.
The combined value of exports and imports is equal to 100.8 percent of GDP. The average applied tariff rate is 6.6 percent. As of June 30, 2018, according to the WTO, Guyana had one nontariff measure in force. In general, foreign and domestic investors are treated equally under the law. The underdeveloped financial sector suffers from a poor institutional framework. Scarce access to financing is a barrier to entrepreneurial activity.