Guyana Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Despite rich natural resources, Guyana is one of the western hemisphere’s poorest and most indebted countries. However, new found oil riches are expected to lead to a rapid economic upswing starting in 2020.

Large oil resources have been found in rounds since 2015 and in early 2020 the country sold its first oil. It is expected to yield an almost immediate dividend in strongly strengthened growth (see further Current policy).

Countryaah.com: Major imports by Guyana, covering a full list of top products imported by the country and trade value for each product category.

So far, the country has been characterized by a number of problems, such as poorly developed infrastructure, oversized bureaucracy, a constant outflow of educated labor and recurring outbreaks of gang-related crime. The informal sector is estimated to correspond to at least one third of GDP.

Exports have been dominated by a few commodities, mainly sugar and minerals, which has made the economy vulnerable to the weather and to price fluctuations in the world’s commodity markets.

During the 1970s, large parts of the business community were nationalized. After severe financial mismanagement, a breakdown was near in the mid-1980s. Society was almost silent, the most elementary goods existed only in the illegal market and real wages fell rapidly.

International pressure, and an urgent necessity, contributed to a radical shift in policy in the market economy direction from 1987. The state’s role in the economy was greatly reduced and foreign investment was encouraged. Most price controls were abolished and the tax system reformed.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including GUY which represents the country of Guyana. Check findjobdescriptions to learn more about Guyana.

During most of the 1990s, economic growth averaged 7 percent per year, and by 1995 inflation had dropped to a single-digit level. From about 1997 until the middle of the 1990s, the development slowed down, when the basic fragility of the economy was reminded and political concerns frightened investors. Floods in 2005 also caused serious damage to crops and infrastructure. However, over the next two years, growth exceeded 5 percent per year and Guyana did quite well through the global financial crisis of 2008.

The state budget has been drawn with large deficits covered by aid and loans. In order to increase and streamline tax revenue, in 2007 a complicated tax system was replaced by a general VAT on goods.

Guyana has also previously been assisted with debt relief. Government debt fell dramatically from more than 120 percent of GDP after the turn of the millennium to around 60 percent in 2007 and has subsequently dropped to 50 percent. The external debt was estimated at around 35 percent of GDP in 2017 and still represents a burden for the country that is dependent on aid.

An important source of foreign capital is money that working Guyanans in other countries send home to their families. In 2010, the remittances accounted for between just over 7 and just over 16 percent of GDP.

Guyana has been a member of the Caribbean, Caricom’s common market for goods, services, people and capital (CSME) since 2006.

In the autumn of 2008, Caricom signed an economic partnership agreement with the EU (EPA), called Cariforum. This means that the Caribbean countries do not have to pay customs duties and other restrictions on virtually all exports to the EU countries. In return, they will gradually phase out tariffs on 87 percent of EU imports until 2033.