Guyana WT/TPR/S/218 
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I. ECONOMIC ENVIRONMENT 
(1) OVERVIEW  
1. Since its last Review in 2003, Guyana h as improved its economic performance, with GDP 
recording particularly robust growth during 2006-08 , when it expanded at an average real rate of 
4.5%.  This reflects a favourable external envir onment, particularly high prices for Guyana's main 
exports and abundant financing capital, as well as s ound macroeconomic policies.  Monetary policy 
has been conducted in a cautious manner and has b een successful in keeping inflation in check.  
Public finances have improved, as witnessed by grow ing primary surpluses and a reduced public debt, 
although the overall budget still post s substantial deficits despite sizable external grants.  
Notwithstanding the progress made, Guyana's per capita GDP remains at only US$1,563, and living 
standards are the second lowest in CARICOM.1  Thus, sustaining economic growth remains vital, and 
requires continued prudent macroeconomic  policies and strengthened governance. 
2. Guyana integration in the world economy has deep ened in recent years, with the trade to GDP 
ratio growing to reach 170% in 2007.  Although dom estic production has diversified to some extent, 
exports are still concentrated on a few primary pr oducts, notably gold, sugar, bauxite, and rice.  
Imports are of great importance to supply the domest ic market, and are equivalent to approximately 
100% of GDP.  Merchandise imports far exceed exports , which generates persistent deficits in the 
current account of the balance of payments.  Thus, the economy is highly dependent on transfers (official grants and remittances) from abroad to finance domestic consumption.  Although the U.S. 
share in Guyana's total merchandise trade fell signifi cantly, it continues to be Guyana's main trading 
partner, followed by Trinidad and Tobago;  another notable change is the rise of imports from Asia. 
(2) S
TRUCTURE OF THE ECONOMY , OUTPUT , AND EMPLOYMENT  
3. In terms of contribution to GDP, the most im portant sector in Guyana is the agriculture, 
forestry and fishing sector, followed by govern ment services, transport and communications, and 
mining and quarrying. (Table I.1).  In nominal terms, the contribution of the primary sector has 
decreased by 8 percentage points since Guyana's last Review, mainly due to a reduction in the 
contribution of sugar cane (see below).  The mining sector involves primarily the production of 
bauxite, diamonds, and gold (Chapter IV(3));  gold  is Guyana's most valuable merchandise export 
(section (6) below). 
4. The share of manufacturing in GDP decreased by  28% between 2003 and 2008, largely due to 
a reduction of around one fifth in the volume of refine d sugar produced, which in turn is the result of a 
decline in sugar prices for exports to the EC (Chapt er IV(2)(i)).  The weight of the services sector 
(including construction) has continued to increase, and was around 57% of GDP in 2008;  all services 
subsectors contributed to this increase, particular ly distribution, and transport and communications. 
5. Three activities have traditionally dominated Gu yana's economy:  sugar, rice, and mining.  
These industries generated 62% of Guyana's exports in 2007 (latest year available)2;  however, their 
contribution to GDP fell from 34.9% in 2003 to 23 .8% in 2008.  Economic diversification is a key 
element in the Government's development strategy .  The Government considers this essential for 
future growth, and it has listed the following sect ors as key diversification opportunities:  non-
traditional agriculture (e.g. fruits and livestock);  fish eries;  manufacturing;  tourism;  and information 
                                                      
1 UNDP online information.  Viewed at:  http://hdrstats.undp.org/2008/countries/country_fact_sheets/ 
cty_fs_GUY.html. 
2 These calculations include production and exports of manufactured sugar and rice. WT/TPR/S/218 Trade Policy Review 
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technology.3  For the latter three sectors, the Governme nt has been implementing specific policies to 
accelerate their development;  the non-traditional ag riculture sector has already shown substantial 
progress and is expected to further develop vi a private entrepreneurship (see Chapter IV). 
Table I.1  
Basic economic indicators, 2003-08  
 2003 2004 2005 2006 2007 2008a 
Gross domestic product (GDP)       
Current GDP (G$ million)b 144,064 156,358 165,028 180,282 217,552 236,059 
Current GDP (US$ million)b 741.6 782.8 824.1 896.9 1,069.1 1,197.2 
Nominal GDP per capita (US$)c 984 1,035 1,086 1,178 1,400 1,563 
Sectoral structure of GDPd       
Primary sector 44.3 43.3 40.4 39.9 38.5 36.3 
Agriculture, forestry and fishing 31.4 31.2 30.2 30.2 27.3 24.9 
   Sugar cane 10.7 11.0 8.7 9.5 6.6 5.0 
   Rice paddy 5.2 4.7 4.8 4.8 4.2 4.2 
   Livestock and other crops 6.8 7.0 7.2 6.9 7.3 7.4 
   Forestry 2.0 1.9 2.2 2.4 2.1 1.7 
   Fishing 6.8 6.8 7.4 6.6 7.0 6.5 
Mining and quarrying 12.9 12.1 10.2 9.7 11.2 11.4 
   Bauxite 1.5 1.4 2.5 2.3 3.1 2.7 
   Other 11.4 10.7 7.7 7.4 8.1 8.7 
Manufacturing 9.2 9.6 8.1 8.7 7.6 6.7 
Sugar 4.3 4.4 3.4 3.9 2.6 2.0 
Rice 1.8 2.1 0.9 1.2 1.2 1.2 
Other 3.1 3.1 3.8 3.6 3.8 3.4 
Services  46.4 46.9 51.4 51.3 54.0 57.1 
Engineering and construction 5.0 5.2 6.1 6.4 6.8 6.9 
Distribution 4.1 4.2 5.1 5.2 5.8 6.1 
Transport and communications 9.3 9.7 11.0 11.3 12.8 13.2 
Rental of dwellings  4.1 4.1 4.6 4.8 5.0 4.9 
Financial services 3.6 3.6 4.0 3.9 4.3 4.5 
Government 18.5 18.3 18.5 17.6 17.0 19.2 
Other 1.8 1.8 2.1 2.1 2.3 2.3 
Total valued added 100.0 100.0 100.0 100.0 100.0 100.0 
Memorandum item       
Population (estimated, end of the yea r) 753,772 756,349 758,925 761,510 763,719 766,183 
 
a Preliminary figures. b Figures at current market prices. 
c Calculations derived from GDP figures at market prices and population estimates (based on the 2002 census). 
d As a percentage of total value added at basic prices.  
Source : WTO Secretariat, based upon information from Guya na's Bureau of Statistics and Bank of Guyana. 
6. Between 2003 and 2005, GDP growth was slow and erratic, with real GDP contracting by 
1.9% in 2005 largely due to the effects of heavy floods (Table I.2).  However, during 2006-08, the economy grew at an average real rate of 4.5%, whic h is considerably higher than the 2.8% average for 
the entire review period (2003-08).  Expansion in GDP  was driven by contributions from most sectors 
in the economy, with the exception of agriculture  and manufacturing;  the fastest growing sectors 
were bauxite production, distribu tion services, and telecommunications.  GDP per capita (in current 
U.S. dollars) increased by 59% between 2003 and 2008, but at US$1,563 in 2008 it remains one of the 
lowest in the CARICOM. 
                                                     
 
3 Ministry of Tourism, Industry and Commerce (2005). Guyana WT/TPR/S/218 
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7. Economic performance has been boosted by favour able external conditions, characterized by 
high international commodities' pri ces and abundant financing capital, as well as restored confidence 
in Guyana's institutions owing to sounder macr oeconomic policies.  Continuing the process of 
restoring such confidence is crucial for Guyana  because in the past its political and economic 
institutions undermined long-term economic performance.4  Throughout the late 1990s, crime and 
social and political tensions contributed to the si gnificant emigration of skilled workers (see below) 
and the decrease in foreign investment in Guyana.5  Thus, it is essential to strengthen public 
institutions and consolidate recent improvements in political and social stability (see Chapter II(2)(i)). 
Table I.2  
Composition of GDP growth by expenditure, 2003-08  
 2003 2004 2005 2006 2007 2008a 
Real annual GDP growth rate (%) 1.1 1.6 -1.9 5.1 5.4 3.1 
Nominal GDP, composition (%)       
Total consumption 76.0 78.5 100.3 89.5 102.4 112.7 
Private consumption 49.7 54.4 73.4 65.3 77.9 87.1 
Public consumption 26.3 24.1 26.9 24.2 24.5 25.6 
Gross capital formation 35.0 32.0 32.3 45.2 39.9 39.7 
Private gross fixed capital formation 21.6 19.5 19.0 22.4 20.5 21.9 
Public gross capital formation 13.5 12.5 13.3 22.8 19.5 17.7 
Net imports of goods and services 11.1 10.6 32.7 34.7 42.4 52.4 
 
a Preliminary figures. 
 
Source : WTO Secretariat, based on information from Guyana Bureau of Statistics. 
8. From an expenditure standpoint, GDP growth w as driven primarily by private consumption, 
which, in nominal terms, grew faster than public cons umption or investment in general (Table I.2).  In 
2008, total consumption exceeded 100% of GDP;  this  is because Guyana consumes more than it 
produces and is, therefore, dependent on foreign sa vings.  For this reason, domestic demand, in 
particular private consumption, could be weakened  if the pace of disbursements from multilateral and 
bilateral creditors slowed down as a result of the wo rld financial crisis being experienced in early 
2009. 
9. Over 2003-08, the participation of gross capita l formation in the economy increased slightly 
as areas such as road transportation, defence ag ainst flooding, agricultural irrigation, and schools 
received additional public investment.6  However, more investment is needed in other sectors such as 
electricity where prices appear high (see Chapter IV (4)).  Much of the required additional investment 
may have to be generated by the private sector, given the public sector's tight budget (see section (4) 
below).  
10. Guyana continues to rely heavily on trade, with imports and exports  representing some 170% 
of GDP in 2007 (latest year available).  Forei gn savings have helped to  finance the continuous 
expansion of net imports  of goods and services, which as a percentage of GDP grew from 11% to 
52% between 2003 and 2008.  In October 2003, the G overnment finalized the drafting of Guyana's 
National Trade Strategy, which stresses the impor tance of trade to the economy and the need to 
respond to the challenges of globalization (see Chapter II(2)).  
                                                      
4 IMF (2007a). 
5 IMF (2007b) 
6 Bank of Guyana (2007). WT/TPR/S/218 Trade Policy Review 
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11. Unemployment is not measured systematically in Guyana, and private-sector information on 
employment is poor.7  The latest available unemployment figures were collected during a population 
census in 2002.8  According to these figures, the participa tion rate of the working age population in 
the labour force was 56%, of which 88% had jobs, th at is, the unemployment rate was 12% in 2002.  
Unemployment levels are higher among women and younger age-groups of the population.  Over the 
review period, the public sector's share of total employment continued to decrease, as the Government 
laid off some 10% of its workforce.  However, th e public sector remains the largest single employer in 
the economy with 27,187 employees in 2007, follow ed by state-owned GUYSUCO, which employs 
19,018 people (Chapter IV(2)(i)).9  There is a significant informal sector, believed to be equivalent in 
size to 30% of formal economic activity.10 
12. As mentioned in its previous Review, sin ce the 1970s Guyana has been undergoing a net 
emigration of nationals.11  During 2003-06, the country lost on average some 9,900 people per year.12  
Anecdotal information suggests that the majority of  the emigrants have a relatively high level of 
education, which implies a loss of relatively hi ghly productive workers and of investments in public 
education.  On the other hand, Guyanese commun ities overseas make important contributions to the 
domestic economy through remittances.13  According to balance-of-payments data, which tends to 
underestimates these transfers, remittances amounted  to US$278.5 million in 2007 (equivalent to 
some 26% of GDP) and US$145.0 million in the first half of 2008.14 
13. According to the United Nations Development Programme (UNDP), Guyana has maintained 
over the years a steady progress towards its Mille nnium Development Goals (MDGs), though the pace 
of progress may be insufficient to achieve some of  the targets for 2015.  The likelihood of Guyana 
meeting its MDGs depends mainly on the sustai nability of economic growth and its effects on 
household disposable income, and on fiscal revenu e available for public expenditure in social 
programmes.15  According to the authorities, a major cons traint towards the achievement of its MDGs 
is the slow or non-disbursement of aid commitments. 
(3) MONETARY AND EXCHANGE RATE POLICIES  
14. The Bank of Guyana is responsible for the conduc t of monetary policy.  The main objectives 
set out in the Bank of Guyana Act of 1998, as ame nded, are:  "fostering domestic price stability 
through the promotion of stable credit and ex change rate conditions, as well as sound financial 
intermediation conducive to the growth of the economy". 
15. The main monetary policy instrument used by the Bank of Guyana is open market operations, 
i.e. the management of the money supply by the Central Bank’s purchase and sale of securities in the 
financial market.  A Committee meets weekly to set weekly targets based on the current and expected 
performance of inflation and the exchange rate, alon g with the Government’s financing requirements.  
However, the Bank of Guyana does not have an infl ation-targeting regime in place, nor does it issue 
                                                      
7 Bank of Guyana (2007). 
8 Guyana's Bureau of Statistics online informati on.  Viewed at:  http://www.statisticsguyana.gov.gy/ 
census.html. 
9 Bank of Guyana (2007). 
10 EIU (2007). 
11 WTO (2003). 
12 Guyana Bureau of Statistics online information.  Viewed at:  http://www.statisticsguyana.gov.gy/ 
pubs.html. 
13 IMF (2005). 
14 Bank of Guyana (2007) and (2008). 
15 UNDP online information.  Viewed at: ht tp://www.undp.org.gy/poverty_reduction.html. Guyana WT/TPR/S/218 
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its own securities, it only coordinates the issuance of government treasury bills (for 91, 182, and 364 
days) via open market auctions.  The weighted aver age discount rate determined in the auctions of 
91 day treasury bills is the market's short-term reference interest rate.16  
16. All deposit-taking financial in stitutions operating in Guyana are subject to a reserve 
requirement ratio of 12% applicable to all liab ilities, which represents the minimum balance these 
institutions are required to maintain with the Ce ntral Bank (see Chapter IV(7)(ii)).  The Bank of 
Guyana has the authority to alter these reserve requi rements as part of its monetary policy.  Although 
its utilization as such has been limited (the ratio  has not been altered since 1999), the authorities 
considered it to be a useful instrument to achieve  the long-term objectives of monetary policy, as it 
links the Bank of Guyana’s balance sheet w ith the balance sheet of the banking system.17   
Table I.3  
Main monetary indicators (end of period), 2003-08  
 2003 2004 2005 2006 2007 2008 
Monetary and credit aggregates  (growth rates)       
M1 16.8 12.4 9.3 27.0 12.8 12.5 
M2 8.3 7.8 8.3 15.9 13.6 12.7 
Credit to the private sector -17.2 -0.4 8.4 17.9 18.7 21.8 
Nominal interest rates       
Treasury Bill discount rate (91 days) 3.40 3.79 3.74 4.16 3.90 4.19 
Treasury Bill discount rate (364 days) 4.01 4.13 4.21 4.24 4.35 4.81 
Prime lending ratea 16.69 15.65 15.24 14.47 13.89 13.91 
Inflationb       
Consumer price index (CPI) 5.0 5.5 7.9 4.5 14.1 6.4 
Exchange rate       
Nominal exchange rate (G$/US$) 194.25 199.75 200.25 201.00 203.50 205.25 
Real effective exchange rate (index 2000=100)c 95.7 92.3 98.7 96.1 .. .. 
 
.. Not available.  
a Represents lending rates of commercial banks weighted  by the amount of loans issued at the corresponding rate. 
b Corresponds to Georgetown's urban consumer price index. c IMF staff estimates, based on CPI statistics;  an increase represents an appreciation. 
 
Source : WTO Secretariat, based on information from Guyana's Bureau of Statistics, Bank  of Guyana;  and IMF. 
17. The urban Consumer Price Index (CPI) for George town, Guyana's main measure of inflation, 
peaked in 2005 and 2007 but remained low throughout most of the period under review (Table I.3).  
In 2005, the CPI rose due to heavy floods that affected the supply of foodstuffs;  in 2007, the main factors driving up inflation were one-off costs ar ising from the implementation of the VAT and the 
rise of international commodity prices, particularly fuel.
18 
                                                      
16 Bank of Guyana online information.  Viewed at:  http://www.bankofguyana.org.gy/Monetarypolicy. 
htm. 
17 Bank of Guyana online information.  Viewed at:  http://www.bankofguyana.org.gy/Monetarypolicy. 
htm. 
18 Bank of Guyana (2007). WT/TPR/S/218 Trade Policy Review 
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18. Nominal interest rates rema ined within a narrow band during 2003-08, with the 91-day 
Treasury Bill discount rate hovering around 4% (Table I.3).  Real short- and long-term (364 days) 
deposit rates were negative or close to zero through out the entire period.  Increased liquidity in the 
financial system has allowed for the reduction in the spread between lending and borrowing rates, but 
it remains high at around 10 percentage points (June 2008).  The reduction of the interest rate spread 
has been accompanied by an increase in the credit to the private sect or, which reached 37.8% of the 
GDP in December 2008. 
19. The Bank of Guyana Act of 1998 states that:  "the rate of exchange of the Guyana dollar in all 
currencies shall be determined on the basis of prev ailing market conditions".  At the same time, the 
Act grants the Bank of Guyana the authority to in tervene in the foreign exchange rate market to 
minimize volatility and maintain price stability.  In  practice, over 2003-08, the nominal exchange rate 
with the U.S. dollar did not vary more than 2% within any given 12-month period.  The IMF has classified Guyana's de facto  exchange rate regime as a "conventional fixed pe g arrangement" that uses 
the U.S. dollar as the exchange rate anchor.
19 
20. In order to participate in the exchange ra te market, private persons may apply for a cambio  
dealer licence with the Ministry of Finance;  this licence must be renewed annually. 
21. Since 2003, the Guyanese dollar has depreciated steadily gainst the U.S. dollar in nominal 
terms, by an average of 1.1% per year.  To the c ontrary, the real effective exchange rate appreciated 
slightly during 2003-06 (latest year available), most  probably as a result of higher inflation in Guyana.  
There is no evidence to suggest that the Gu yanese dollar is significantly overvalued.  
(4) FISCAL POLICY  
22. The Ministry of Finance is responsible for pr eparing the annual budget and for administering 
grants and loans received through different debt relief initiatives.   In general, public finances have 
improved due to growing central government primar y surpluses and external transfers, although the 
overall budget still posts substantial deficits (Table I.4).   
Table I.4  
Fiscal accounts of the Ce ntral Government, FY2003-08  
(Percentage of current GDP) 
 2003 2004 2005 2006 2007 2008a 
Total revenue 37.3 39.5 41.3 44.3 42.0 42.1 
    Current revenue 31.5 33.0 34.0 34.6 36.9 34.9 
        Tax revenue 28.8 30.8 32.1 32.4 35.5 33.5 
            Income tax 13.4 13.7 14.4 14.9 13.6 13.3 
    Property taxes 0.6 0.5 0.5 0.5 0.4 0.5 
            Consumption taxesb 10.6 12.5 12.9 12.9 0.7 n.a. 
            Value-added tax (VAT) n.a. n.a. n.a. n.a. 9.8 10.2 
            Excise tax n.a. n.a. n.a. n.a. 7.1 5.6 
            Import duties 2.3 2.4 2.2 2.3 2.8 2.8 
   Other taxes and licences 1.9 1.7 2.0 1.8 1.1 1.0 
        Non-tax revenue 2.8 2.2 1.9 2.2 1.4 1.4 
             Rents a nd royalties 0.7 0.6 0.3 0.1 0.1 0.0 
             Dividends from public enterprises 0.3 0.4 0.7 0.6 0.1 0.2 
             Other 1.8 1.1 0.9 1.5 1.2 1.2 
    Capital revenue 5.8 6.5 7.3 9.7 5.1 7.2 
        HIPC debt reliefc 4.0 3.8 3.3 3.4 1.7 1.2 
        Other grants 1.8 2.7 4.0 6.3 3.5 5.8 
Table I.4 (cont'd) 
                                                      
19 IMF online information.  Viewed at:  http://www.imf.org/external/np/mfd/er/2008/eng/0408.htm. Guyana WT/TPR/S/218 
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 2003 2004 2005 2006 2007 2008a 
Total expenditure 44.4 44.3 53.9 56.3 52.2 48.5 
Current expenditure  28.4 27.1 30.0 30.6 29.7 30.4 
Personal emoluments 11.3 11.1 11.2 11.1 10.1 10.1 
Pensions 2.3 2.4 2.3 2.7 2.8 3.0 
Other goods and services 10.1 8.2 10.5 10.9 9.4 10.3 
    Transfersd 4.7 5.4 6.0 5.9 7.4 6.9 
Interest payments 4.1 2.9 2.6 2.5 2.8 2.8 
        Domestic 2.1 2.0 1.8 1.4 1.4 2.0 
        External 2.0 0.9 0.8 1.1 1.4 0.8 
     Capital expenditure 12.0 14.3 21.3 23.2 19.7 15.4 
Current (primary) deficit/surp lus 3.1 5.9 4. 0 4.0 7.2 4.5 
Overall balance before grantse -12.9 -11.3 -19.9 -21.7 -15.3 -13.6 
Overall balance after grantse -7.1 -4.8 -12.6 -12.0 -10.2 -6.4 
Memorandum item       
Public enterprises overall balance before taxesf 2.0 2.9 1.2 2.8 0.4 -1.1 
Central government total external  debt 161.7 151.8 147.4 116.3 67.2 69.6 
Central government total debt  205.2 193.9 188.4 157.5 99.6 101.4 
Central government total debt (US$ milli on) 1,521.7 1,518. 3 1,552.9 1,412.9 1,064.8 1,199.5 
 
.. Not available. 
n.a. Not applicable.  
a Preliminary figures. 
b The consumption tax was gradually substitu ted by the VAT as from January of 2007. 
c Heavily Indebted Poor Countries debt relief program me coordinated by the IMF, World Bank, and IADB. 
d Includes transfers to educatio nal grants, scholarships, to local authorities, and contributions to local and international 
 organizations. e Includes both HIPC debt relief and other external grants. 
f Represents the overall balance of all publicly owned non-financial enterprises, including capital expenditures but excluding 
 transfers and taxes paid to central government.  
Source : WTO Secretariat, based on data from Bank of Guyana. 
23. The Central Government's overall accounts had st arted to improve in 2002, mainly as a result 
of higher tax receipts, particularly income tax, and controlled current expe nditure.  However, the 
higher current expenditure required to cope with th e effects of floods in 2005, together with higher 
capital expenditure on infrastructure projects, led to  the deterioration of the Central Government's 
overall fiscal balance in 2005 and 2006.  In 2007, th is situation was reverted as tax receipts rose 
significantly with the introduction of the VAT and exci se tax, while total expenditure grew at slower 
pace than GDP.  In 2008, the curre nt surplus fell by 37.5% in term s of GDP, mainly due to measures 
to mitigate higher fuel prices, including electricity s ubsidies and lower fuel excise taxes, but by early 
2009 these measures had been eliminated.  External official transfers in the form of grants (including 
debt-relief initiatives) as well as loans (including PetroCaribe's disbursements20) have also played an 
important role in improving public finances in Gu yana by providing up to 20% of the Central 
Government's total revenue. 
24. The authorities foresee a gradual reduction in the overall fiscal balance (after grants) to some 
3.5% of GDP by 2012.  In order to achieve this  fiscal goal, the authorities committed to maintain 
spending discipline, strengthen efforts to redu ce evasion and improve tax administration, reduce 
public investment once major projects are complete d, and improve the operational surplus of public 
owned enterprises.  Long-term debt sustainabilit y will largely depend on the implementation of the 
envisaged fiscal consolidation and the continuation of debt relief. 
                                                      
20 PetroCaribe is an alliance between Venezuela an d 14 Caribbean countries to purchase oil from 
Venezuela under preferential payment conditions. WT/TPR/S/218 Trade Policy Review 
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25. A number of fiscal reforms would seem necessary to support fiscal consolidation.  In 
particular, in the context of an IADB-financed  competitiveness programme, a comprehensive tax 
study will be carried out to assess the rationale  behind the current tax structure and recommend 
formulas to, inter alia , reduce and unify the corporate income tax, import duties, and tax incentives, 
and to reduce or eliminate export taxes in a way that boosts investment and does not unduly 
compromise government revenues.21 
26. Public enterprises had a positive impact in the public sector's fiscal balance during 2003-06, 
and, consequently, they helped finance the central  government deficit.  However, this situation 
changed in 2007-08 due to higher capital expenditure , particularly to finance the modernization of 
GUYSUCO's sugar plants (Chapter IV(2)(i)).  In 2008, public enterprises made a negative 
contribution to public finances equivalent to 1.1% of GDP. 
27. During the review period, the stock of external public and publicly guaranteed debt decreased 
significantly, to about 70%, which brought total central government debt to around 101% of GDP in December 2008.  Over the same period, external debt  interest payment with respect to GDP also fell 
significantly.  These reductions are almost entirely attributed to debt relief under the Multilateral Debt 
Relief Initiative (MDRI), the Enhanced Highly Indebt ed Poor Countries (HIPC) Initiative, and other 
grants delivered by multilateral creditors.  In th at respect, Guyana met the necessary criteria and 
qualified for irrevocable debt relief under the HIPC  Initiative.  According to the latest Debt 
Sustainability Analysis carried out by the IMF a nd the World Bank in February 2009, Guyana's risk 
of debt distress could increase if non-debt-creating flows and real GDP do not grow as projected.
22  
Nevertheless, Guyana's risk of debt distress was classified as moderate, which is an important 
improvement with respect to previous years. 
(5) BALANCE OF PAYMENTS  
28. As in the previous review period (1997-2002), th e current account of the balance of payments 
recorded sizable deficits during 2003-08.  This was mostly due to large deficits in merchandise trade 
balance (Table I.5).  Despite the higher interna tional prices of the main commodities exported by 
Guyana, imports grew at a faster pace than exports ;  as a result, the current account deficit worsened, 
reaching a peak of 28% of GDP in 2007. 
29. The traditional deficit in the services account in creased during the review period, mainly as a 
result of higher imports of non-factor services.  Th e tourism services account was also in deficit;  the 
authorities acknowledge that more investment in in frastructure (e.g. transport) could help Guyana 
exploit its tourism potential and reverse this deficit.23  Debt service payments decreased due to debt 
relief initiatives.  Transfers, particularly rem ittances by Guyanese workers abroad, grew sixfold 
between 2003 and June 2008 making an importa nt positive contribution to the current account. 
30. Since 2005, large capital transfers, including  MDRI relief (see above), have underpinned 
surpluses in the capital account, whic h have been more than sufficien t to cover the deficits in the 
current account.  As a result, international reser ves have increased, to reach US$355.9 million in 
December 2008, equivalent to 3.3 m onths of merchandise imports.  Debt  relief inflows were crucial to 
finance the current account, and permitted an incr ease in the foreign assets position of the Bank of 
Guyana. 
                                                      
21 IADB online information.  Viewed at:  h ttp://www.iadb.org/projects/project.cfm?id=GY-
L1006&lang =en. 
22 IMF (2009). 
23 Ministry of Tourism, Industry and Commerce (2005). Guyana WT/TPR/S/218 
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31. Medium and long-term private capital inflows expanded at an average annual rate of 45% 
during 2003-08.  Inflows of foreign direct investment (FDI) were directed mainly into telecommunications, mining, and forestry.  In 2007, the capital account registered a high outflow of short-term capital that reflects commercial banks' accumulation of foreign assets.
24  According to 
UNCTAD's FDI performance index, Guyana ranked 11th during 2005-07, with FDI performance 
above its potential.25  Nevertheless, as mentioned in Chapter IV, investment levels appear to be 
insufficient in a number of sectors, partic ularly those related to infrastructure. 
Table I.5  
Balance of payments, 2003-08  
(US$ million) 
 2003 2004 2005 2006 2007 2008a 
I. Current account -82.6 -69.8 -157.6 -250.3 -189.1 -299.1 
A. Merchandise trade balance -58.9 -57.8 -232.75 -299.8 -365.1 -501.8 
Exports (f.o.b.) 512.8 589.0 550.9 585.1 698.0 798.4 
Imports (c.i.f.)b 571.7 646.8 783.7 885.0 1,063.1 1,300.2 
B. Services trade balance -70.5 -86.0 -92.0 -166.8 -110.8 -126.1 
Non-factor services (net)  -15.3 -46.7 -53.0 -97.8 -99.6 -111.3 
Factor services (net) -55.2 -39.3 -39.0 -69.0 -11.2 -14.8 
C. Unilateral transfers 46.8 74.0 167.2 216.3 286.8 328.8 
II. Capital and financial account 58.6 38.9 178.8 268.6 168.7 305.7 
A. Capital transferc 43.8 45.9 52.1 315.6 414.1 38.7 
B. Medium and long-term capital  42.1 -1.4 143.5 -42.9 -150.4 272.8 
Public sector (net) 16.0 -31.4 66.7 -145.3 -260.7 93.7 
Non-financial public sector (n et) 16.0 14.1 66.7 71.8 -260.7 93.7 
Other (net) 0.0 -45.5 0.0 -217.1 0.0 0.0 
Private sector (net)d 26.1 30.0 76.8 102.4 110.3 179.1 
C. Short term capital  -27.3 -5.6 -16.8 -4.1 -95.0 -5.8 
III. Errors and omissions 15. 1 -12.2 -13.1 24.6 19.1 0.4 
IV. Exceptional financing 9.7 11.6 15.8 18.1 38.7 37.8 
Debt relief  9.7 11.6 0.0 0.0 7.5 4.7 
Debt stock restructuring  0.0 0.0 1.8 1.7 2.0 -0.6 
Debt forgiveness  0.0 0.0 14.0 16.4 29.2 33.7 
V. Change in net foreign assets of BoGe -0.8 31.5 -23.9 -61.0 -37.3 -44.8 
Memorandum item       
Current account/GDP (%) 11.1 8.9 19.1 27.9 17.7 24.9 
 
a Preliminary figures. b The IMF balance-of-payments guidelines recommend the use of f.o.b. figures for both exports and imports.  The Guyanese 
 authorities noted that work is ongoing to produce f.o. b. import figures for balance-of-payments purposes.   
c Includes Multilateral Debt Relief Initiative transfers.  
d Includes inflows of foreign direct investment. 
e A negative change corresponds to an increase in international reserves of the Bank of Guyana. 
 
Source : WTO Secretariat, based on information from Bank of Guyana. 
                                                      
24 Bank of Guyana (2007). 
25 The FDI performance index is the ratio of a country´s share in global FDI inflows to its share in 
global GDP.  This ranking reflects Guyana's attractiveness as an investment destination, but it is also due in part 
to Guyana's still modest GPD, relative to which FDI infl ows appear sizeable.  In absolute value terms, GDP and 
FDI inflows in Guyana were, respectively, the lowest and second lowest in South America during 2005-07. WT/TPR/S/218 Trade Policy Review 
Page 10 
 
 
(6) DEVELOPMENTS IN MERCHANDISE TRADE  
32.  According to information from the United Na tions Comtrade database (Tables AI.1 through 
AI.4), Guyana's total trade (imports plus expor ts and re-exports) increased at a nominal average 
annual rate of 15% over 2003-07;  as a proportion of GDP, total trade increased from 139% to 170%.  
Exports represented on average 43% of total trade,  while re-exports represented on average 2% of 
total exports or US$12 million.  
(a) Composition of trade 
33. In value terms, exports increased by ab out 66% between 2003 and 2007, to reach 
US$785 million (Table AI.1).  Guyana has historical ly been a large exporter of commodities such as 
sugar, rice, and mineral products.  In 2007, exports of primary pr oducts were US$484 million, a 74% 
increase over the 2003 level.  Agricultural exports grew  in value terms but their share of total exports 
decreased by 5 percentage points.  Exports of mining products grew by 120% over the period, 
reflecting strong demand from other emerging markets a nd higher world prices of metals.  Exports of 
manufactured goods (including di amonds) totalled US$142 million. 
34. Over 2003-07, Guyana's export structure remained highly concentrated in a handful of 
commodities, namely, gold, bauxite, sugar, and rice.  Among those, notable changes were the 
decreased importance of exports of sugars and frozen crustaceans (mainl y shrimps), which were 
displaced by gold and bauxite as Guyana's fi rst and fourth export products, respectively. 
35. The value of imports reached US$1,029 million in 2007, or 85% higher than in 2003 
(Table AI.2).  Although imports of manufactures incr eased faster than imports of primary products 
during the period (with annual average growth of 92% and 75%, respectively), the composition of 
imports remained essentially unchanged.  Manuf actures remained the largest importing sector, 
accounting for 61.0% of total imports in 2007.  Mach inery and transport equipment's share of imports 
grew by some 22.7%, remaining the most important single import category with 28.1% of total imports.  The share of primary products decreased by 2 percentage points over the period, to 39.0% in 
2007;  on average, fuels accounted for 27% of to tal imports, and comprised the second largest import 
category.  The share of agricultural imports declined  by almost 2 percentage points over the period, to 
14.3% in 2007. 
(b) Direction of trade 
36. The direction of Guyana's merchandise trade ch anged during 2003-07 relative to the previous 
review period (1998-2002).  Particularly apparent  was the reduction of the United States' share in 
Guyana's total trade, from 26.3% in 2003 to 20.5% in 2007, although Guyana's exports to the 
United States grew in value terms.  As a gr oup, the European Communities (EC25) remained 
Guyana's second main trading partner, accounti ng for 19.4% of total trade in 2007.  CARICOM 
Member countries' share of Guyana's total trade remained constant at around 25%.   Guyana WT/TPR/S/218 
 Page 11 
 
 
37. In 2007, Canada was the main export market for Guyanese products with 21.6% of total 
exports, followed by the United Kingdom and the Unite d States (Table AI.3).  Although exports to 
both the United States and the EC grew in value term s, their share in total e xports declined by some 
5 percentage points, reflecting the phasing out of preferential access to Guyanese agricultural 
products, particularly rice and sugar (Chapter IV(2)(i )).  Exports to Asia, particularly to China and 
East Asia26, were three times higher in 2007 than in 2003,  partly reflecting highe r economic growth in 
this part of the world.  The shares of total exports to the Netherlands, Suriname, and Ukraine 
(aluminium ores in the case of the latter) also registered significant increases during the review 
period. 
38. Guyanese imports from the United States grew in value but lost market share, while those 
from Asia increased significantly in both dimensions (Table AI.4).  However, the United States along 
with Trinidad and Tobago, remained Guyana's ma in suppliers in 2007, each with 25.1% of total 
imports.  Imports from China grew almost fivefold in value terms between 2003 and 2007, accounting for 8.5% of total imports in 2007.  Imports from Cana da and India also gained market share during the 
period. 
(7) O
UTLOOK  
39. The Ministry of Finance expected real GDP grow th to slow to about 4.7% in 2009 largely due 
to lower output from the commodities exports;  it al so expected easing food and oil prices to keep 
inflation below 5.2% in 2009.  The deficit in th e current account of the balance of payments was 
expected to recede as a result of lower imports.  Ho wever, the capital account is projected to decline 
10.1% based on projected lower levels of FDI and capital transfers, which will eventually cause a 
reduction in Guyana's international reserves if de bt relief inflows do not increase as projected.  The 
central government's fiscal position is expected to de teriorate slightly in 2009, but the overall fiscal 
balance target of 3.5% of GDP for 2012 is not expected to be affected.27 
                                                      
26 Chinese Taipei, Singapore, Hong Kong China, Thailand, Malaysia, and Korea. 
27 Information provided by the Guyanese authorities.