Guyana STPRI Score Revised Up On Successful Completion Of Local Elections And Falling Inflation

• Fitch Solutions has revised its Short-Term Political Risk Index (STPRI) score for Guyana from 57.4 to 59.9 out of 100.
• The revision is based on both softening price growth and the successful completion of the local government elections (held on June 12, 2023), which bode well for the ‘policy continuity’ and ‘social stability’ components of the index.
• The successful completion of the local government elections and falling inflation suggest a broadly improving political environment in Guyana.
• Granted, the local government elections are far less consequential compared to the presidential elections. Nevertheless, the elections took place in an orderly fashion and, unlike the March 2020 snap general elections, the results were not disputed and protests did not emerge, boosting confidence in the market’s democratic processes.
• Additionally, the latest monthly data shows inflation decelerating to 3.3% y-o-y in April and 3.0% in May, down from 6.4% in January due to falling food prices. This, coupled with the government’s expansionary 2023 budget will improve household purchasing power, which in turn will bode well for social stability.
• Despite the upward revision to the STPRI score, Guyana’s score is still somewhat low in part due to a poor security environment and persistent ethnic tensions.

(Source: Fitch Solutions)