Economy of Guadeloupe

The economy of Guadeloupe depends on tourism, agriculture, light industry, and services. It is reliant upon mainland France for large subsidies and imports, and public administration is the largest single employer on the islands. Unemployment is especially high among the youth population.In 2017, the Gross Domestic Product (GDP) of Guadeloupe was â‚¬9.079 billion, showing 3.4% growth. The GDP per capita of Guadeloupe was â‚¬23,152. Imports amounted to â‚¬3.019 billion, and exports to â‚¬1.157 billion. The main export products are bananas, sugar, and rum. Banana exports suffered in 2017 from damages due to Hurricane Irma and Hurricane Maria.

Top Sectors in Guadeloupe

Tourism in Guadeloupe

A major source of income, attracting visitors primarily from France and North America. Cruise ship arrivals are also on the rise, with Pointe-Ã -Pitre serving as a key cruise terminal.

Agriculture in Guadeloupe

Traditionally focused on sugarcane, agriculture is diversifying. Bananas now contribute roughly half of export earnings. Other crops cultivated include eggplant, guinnep, noni, sapotilla, various squashes, yam, gourds, plantains, christophine, cocoa, jackfruit, pomegranate, and flowers. While some vegetables and root crops are grown for local consumption, Guadeloupe remains dependent on imported food, mainly from France.

Industry in Guadeloupe

Sugar and rum production, solar energy, cement, furniture, and clothing are the most notable players in Guadeloupe's light industries. However, most manufactured goods and fuel are imported.

Guadeloupe - Key Economic Indicators

Exports and Imports

While specific data for 2024 might not be readily available, 2017 figures provide a general idea. Here's a breakdown:
Exports: €1.157 billion (main exports: bananas (around 50% of export earnings), sugar, rum)
Imports: €3.019 billion

Infrastructure

Developed Network: Guadeloupe boasts a well-developed road network, with approximately X,000 kilometers (data unavailable) of paved roads in urban areas. This facilitates the movement of goods and people within the islands.
Focus on Improvement: Upgrading and maintaining infrastructure, especially in rural areas, remains a priority to ensure island-wide connectivity. Around Y% (data unavailable) of the population might reside in rural areas that could benefit from improved infrastructure.

Balance of Trade

Trade Gap: Guadeloupe typically experiences a trade gap, where the value of imports exceeds the value of exports by roughly €1.862 billion (2017 data). This highlights the importance of promoting exports and potentially reducing reliance on certain imports.

Fiscal Policy

French Integration: As an overseas department of France, Guadeloupe's fiscal policy is closely linked to the French national budget. This ensures access to funding for social programs and infrastructure development.
Government Priorities: Education, healthcare, and public administration are likely to be significant spending areas. France also provides substantial subsidies, estimated at around Z% (data unavailable) of Guadeloupe's GDP, to support the local economy.
Tax System: Taxation follows the French system, with a mix of income taxes, value-added tax (VAT) typically around X% (data unavailable), and other levies designed to generate revenue for government operations.

Monetary Policy

Eurozone Currency: Guadeloupe, as part of France, uses the Euro (€) as its currency. The European Central Bank (ECB) sets monetary policy for the entire Eurozone, influencing interest rates and inflation across member countries. This fosters economic stability within the region.

Trade Agreements

Not a NAFTA Member: Guadeloupe is not a member of the North American Free Trade Agreement (NAFTA).
EU Membership Benefits: Through its association with France, Guadeloupe benefits from trade agreements negotiated by the European Union (EU) with numerous countries and blocs. These agreements offer reduced tariffs or quotas on specific goods traded with partner countries, potentially boosting export opportunities by an estimated A% (data unavailable).

Environmental Regulations

French Framework: Guadeloupe adheres to environmental regulations established by France, which align with European Union directives. These regulations aim to protect air and water quality, promote waste management, and conserve biodiversity. This ensures a focus on sustainable development.
Ongoing Efforts: Balancing economic development with environmental sustainability remains an ongoing effort.

Tax System in Guadeloupe

Capital Gains Tax:
Tax on profits from investments. Rates can vary depending on the type and duration of the investment.
Corporate Tax Rate:
The standard corporate tax rate in Guadeloupe, as part of France, is 25% as of 2022. This rate applies to the profits of businesses operating within the territory.
Sales Tax:
Value Added Tax (VAT) in Guadeloupe is set at a standard rate of 8.5%, which is lower than the mainland France rate of 20%. Certain goods and services may have reduced rates or exemptions.
Property Tax:
Property tax rates can vary depending on the location and type of property. Residential property tax rates typically range from 1% to 3% of the property's assessed value.
Payroll Tax:
Employers are required to pay social security contributions on behalf of their employees. These contributions can amount to approximately 40% of an employee's gross salary, covering various social benefits such as healthcare, unemployment, and pensions.
Tax Deductions and Credits:
Various deductions and credits are available to both individuals and businesses to reduce their tax liability. For example, individuals may receive deductions for mortgage interest, charitable donations, and certain family-related expenses. Businesses can benefit from investment incentives and research and development credits.
Tax Compliance:
The efficiency of tax collection in Guadeloupe is managed by the French tax authorities. Taxpayers are expected to file annual returns and comply with rigorous reporting standards. Penalties for non-compliance can include fines and interest on unpaid taxes.
Tax Burden:
The overall tax burden in Guadeloupe, reflecting the total amount of taxes paid by individuals and businesses, is influenced by the combination of the above taxes. The tax-to-GDP ratio in France, including Guadeloupe, is approximately 45%, indicating a relatively high level of taxation compared to other countries.