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South America and South Atlantic Islands
Guyana |
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Last reviewed: 6 June 2008 |
Country information
ECONOMY
Basic Economic Facts
GDP: Approximately US$870 million (US$782 million in 2005)
Per capita GDP: Approximately US$1,147 (US$1,039 in 2005)
Annual Growth: 4.7% (2006)
Inflation: 7.2% (2006)
Major Industries: Sugar, bauxite, rice, timber, fishing (shrimp), gold mining, diamonds
Major Trading Partners: US, Canada, UK, Caribbean (especially Trinidad and Tobago) Brazil, China and India.
UK Trade & Investment Country Profile: Guyana
Guyana is a middle income country. Nominal GDP per capita stands at US$1,147 (2006).
The economy grew by 4.7% in 2006 after a period of negative growth in 2005 due to the effects of the widespread flooding in January/February of that year. Business confidence remains low. The management of certain part-privatised utilities, and public sector disatisfaction with low wage levels, have both proved problematic. Inflation stood at 7.2% in 2006 (6.3% in 2005), although it has accelerated sharply in the first half of 2007.
A former finance minister, President Jagdeo has tried to turn Guyana’s economy around. In September 2002, the IMF agreed a poverty reduction and growth facility (PRGF) allowing an initial US$7m in aid. This was supplemented in September 2003 by a further tranche of debt relief, and again in early 2004 when HIPC completion status was achieved. The agreement by the leaders of the G8 industrialised states at their July 2005 summit in Gleneagles, Scotland, to cancel about £31bn of debts owed by the world's poorest countries, saw Guyana have US$336m written off. And in 2007 the Inter American Development Bank granted Guyana a US$356.5m debt write off which effectively removed the country from its "highly indebted" status. However, recent multilateral borrowing could undermine this.
Since the agreement with the World Bank in 2000 to restructure the sugar sector (18% of GDP) to be better able to compete with the rest of the world, Guyana has introduced a number of reforms including the construction of a new state-of-the-art sugar factory at the Skeldon Estate in Berbice, which includes power generation from bagasse. Other measures currently being considered include a distillery and the production of ethanol. Since the November 2005 agreement on reforms to the EU sugar regime, which cuts the price obtained by ACP sugar producers by 36% over a four-year period, Guyana has had to speed up its planned reforms and is receiving transitional assistance from the EU to help bridge the funding gap. DFID also provided funding to help Guyana produce an Action Plan which set out its requirements for support during the transition period and with assistance for plans to enhance competitiveness.
Negotiations on an Economic Partnership Agreement between the EU and CARIFORUM concluded successfully before the 31 December deadline. Guyana will benefit from an additional quota of 30,000 tonnes of sugar to be shared between other Commonwealth Caribbean sugar producers.
Guyana has also successfully entered the organic market and efforts are being made to expand the tourism sector. Donor funded infrastructure projects are planned to improve roads, drainage, sea and communications.
Construction work on the Tacutu Bridge connecting Guyana to Brazil is now well underway and is expected to be completed in early 2008. Once finished, the bridge will open the south of the country to new markets. Northern provinces of Brazil would then export to the USA, Caribbean and Europe through Guyana. The economic benefits for Guyana would be substantial.
The decision by the UN’s Tribunal of the law of the sea to award two thirds of the disputed maritime territory on the border between Guyana and Suriname could also have a positive effect on the economy if the reserves of oil and gas that are predicted to lie in that area are proven. Further exploration is not expected to get underway until 2009.
