Guyana with a population of 752,000 is the only English speaking country in South America whilst it is presently one of the poorest nations in the Western Hemisphere.
Guyana is located at the point where the Caribbean Sea meets South America.
The country is blessed with virgin rainforests and an Amazon basin that quite very well be marketed for a future prosperous eco-tourism industry that is in global demand.
POLITICS: please contact BankINTRO.com for further details.
ECONOMY: during the 1990’s, the government changed economic course by implementing market based policies coupled with an economic recovery plan encouraging foreign investment, reforms and privatization policies. This is a complete opposite view of how the Guyanese economy was managed during the 1970-80’s of socialist policies. Guyana’s experiment with socialism has been costly as the overall economy even after the buoyant growth during the 1990’s was still smaller by the late 1990’s when compared to Guyana’s economy in the early 1970’s. The future is bright for Guyana if it can develop infrastructure, particularly increasing electrical energy capabilities to support bauxite and other industries. There has been significant foreign direct investment into Guyana’s mining industry which is very positive. The main industries do include agriculture (ie. sugar), textiles, mining (ie. gold, bauxite), food products and lumber. Guyana is one of the few countries in the world with its low labor wages that has the ability to compete with neighboring Brazil in sugar although sugar production is at risk. The country however relies heavily on remittances, grants, loans and debt relief cancellation. Challenges to the economy include no current hydrocarbon reserves; the country is a net oil and natural gas importer. This energy deficiency creates havoc with the country’s balance of payments shortfalls. However, Guyana is now self-sufficient in electricity production / consumption.
Economic Statistics
Total GDP as measured by purchasing power parity stands at 3 billion USD (2009) with corresponding GDP/Capita at 3,900 USD. Market GDP stands at 1.2 billion USD (2009). GDP growth rates include year 2010 forecasted at 4 percent of GDP, 2009 which fell 1.2 percent of GDP (recession), 2008 growth rate at 3.1 percent, 2007 at 5.4 percent. Inflation quotes include year 2010 estimated at 3.5 percent, 2009 at 4.4 percent, 2008 inflation at 8.3 percent, 2007 inflation at 12.2 percent. The fiscal deficit stands at 7.9 percent of GDP (2008). Total external debt is at 70 percent of GDP. Total debt to GDP stands at a high valuation of 120 percent (2007). The current account is in deficit at 223 million USD reflecting a pattern of running 200 million per year shortfall. The corresponding trade position is in deficit at 414 million USD (2009). The resulting overall balance of payments account is in deficit at 6.5 percent of GDP for 2009 with the deficit reaching a peak in 2005 at 13.6 percent of GDP. Unemployment stood at 11 percent for 2007.
POSITIVES: very high literacy rate, tax evasion has declined, stable legal system based on English common law, CARICOM member (Caribbean common market) since 2006. CONCERN: water pollution, shortage of skilled labor, weak infrastructure, approximately 3 percent of the adult population is infected with AIDS/HIV, high infant mortality, declining total population.
REGIONAL ANALYSIS: Suriname, Brazil, Trinidad & Tobago
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BANKING SYSTEM: high level of non-performing loans (NPLs) remain an on-going concern to the overall stability of the banking system. Guyana’s gross international reserves came in at 622 million USD equivalents as of January 31, 2010.
KNOWLEDGE: Mineral Resources
Guyana has a wealth of natural resources including gold and bauxite. Guyana’s huge Omai mine has produced upwards of 500,000 ounces of gold per year which is located in the Guiana Shield, one of the world's most prolific gold belts. In addition to mineral production, Guyana has tremendous potential with hydroelectric production. But more importantly, Guyana has great opportunity with eco-tourism with its pristine eco-systems & bio-diversity that is in large demand by many tourists in the global community.
CURRENCY: ISO symbol 'GYD', Guyana dollar, Guyanese dollar. At time of review on April 5, 2010, the exchange rate for the Guyanese dollar was at 204.70 GYD to 1 US-dollar (USD) and/or 276.13 GYD to 1 Euroland Euro (EUR). Floating exchange rate regime is in place and has served Guyana well to date from the previous fixed exchange peg. The merging of the official market rate with its large parallel market rate for transactions led to a large depreciation in the currency. All exchange controls are abolished.
CURRENCY HISTORY: the GYD has been in national circulation since year 1839, one of the world’s longest surviving currencies that remains in use. Historical exchange valuations include year 1997 at 143 GYD to 1 USD, 1998 at 150, 2000 at 142, year 2001 at 150.5, 2002 at 178, 2003 at 182.4, 2004 at 187.3, 2005 at 189.5, 2006 at 179, year 2007 at 201.9.
CURRENCY FORECAST: the Guyanese dollar however remains vulnerable to external and internal shocks (trade disruptions, weather - violent storms) coupled with a heavy debt burden keeps Guyana in a higher currency risk category. The country remains overly dependent upon offshore remittances, loans / grants and foreign direct investment in order to fund the country’s massive balance of payments shortfall.
UPDATED: April 5, 2010
