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An Update on Belize’s Economy

Senator Christopher Coye is the Minister of State in the Ministry of Finance and he told the media today that Belize’s economy is performing well. But the Minister was cautious because there are still uncertain international factors to consider. 

Christopher Coye, Minister of State, Ministry of Finance: “Besides our actual organic growth we will see quite a good performance. Now I don’t want to be overly optimistic because we also have headwinds in the sense of inflation and the war in Ukraine and the overall effect that that has on the global economy especially our major trading partners but we are doing well and I think we’re ahead of target at this point in time.”

Reporter: So is it that we’ve stepped away from that financial cliff ? 

Christopher Coye, Minister of State, Ministry of Finance: “Well I would tell you in terms of the IMF. They still maintain in terms of their staff consultation, their article 4 report that on the side of the debt we are still at unsustainable levels. We have committed in terms of our fiscal consolidation and our fiscal responsible approach to reduce our debt to GDP to around 85% by 2025 and to roughly 70% by 2030. That is a tall order and that means that we have to maintain fiscal consolidation, maintain prudence and manage our budget very tightly over the next several years in order to achieve those targets. I think it’s achievable nonetheless. As we continue that then we move further and further away from that fiscal cliff.”

However, goods and services continue to increase at a significant rate. The Economic Commission for Latin America and the Caribbean (ECLAC) released a new policy brief earlier this month that analyzes the war in Ukraine’s economic and social effects on the region and provides recommendations to countries on how to address them. Minister of State in the Ministry of Finance, Christopher Coye, told us how the government is looking to address inflation. 

Christopher Coye, Minister of State, Ministry of Finance: “Belize’s economy just in rough terms is a $4 billion dollar economic. We import roughly $2 billion dollars, we export roughly half a billion dollars. Clearly our economy is significantly impacted by what occurs outside Belize and that translates through imports into what happens in Belize. So inflation I don’t say is a US phenomenon it’s currently a global phenomenon. The inflation in the developed countries, in Europe they’re also very high but for us our major trading partners which includes the US is exceedingly high, far more than what the inflation is in Belize. I think the last monthly report indicated that inflation was at around 8% in the US for Belize we’re around 5% so we are what would we say 60% less than what the inflation is in the US but the fact of the matter is we do have inflation, we are seeing prices go up largely because of the fuel cost and that is impacted by the war in Ukraine but also by supply chain issues and demand issues even before the war in Ukraine but with all that together there is also the effect on food prices, especially on essentials and so we do see the inflationary effect across the board. Government has made decisions and efforts with a view to mute the impact of inflation for those most affected.”

The document adds that higher commodity prices, the increase in transportation costs and disruptions to international supply chains will affect the region’s goods exports.