IMF Indications Point Toward Better Financial Year for 2023
Inflation has been on an upward trajectory for the better part of last year, and this has been attributed to the effects of Covid-19, as well as the impacts of the Russo-Ukrainian warfare that began last February. These are the key factors that influence global prices to soar which then trickles into Belize’s market. In 2022, inflation in Belize doubled from 3.2% to 6.1%, which drastically slowed down economic development. Current world market prices indicate that 2023 might also be economically challenging in the agriculture and health industry due to the rising costs of input products, equipment, and medications; however, the Minister of State in the Ministry of Finance, Christopher Coye, explains that models formulated by the International Monetary Fund (IMF) show that by the next mid-term the inflation rate in Belize should reduce to about three point nine percent.
Christopher Coye, Minister of State, Ministry of Finance: “I think it’s useful to appreciate where Belize is in the context of its neighbors and including its major trading partner the US. Belize’s inflation has been significantly lower between 20 and 30 % lower than the US for example and most of the regional countries at between 6 and 6.3%. We had asked the IMF to provide some technical assistance in terms of analyzing the factors that impact on inflation in Belize and the results have actually come in more recently and with the modeling that they have done been able to not only look at what are those factors but also project forward what is likely to be the inflation going forward. Well based on those models the inflation is almost entirely explained by just a very few factors. US inflation itself we import our inflation for the most part so most of our inflation arises because of global external factors and in part the US inflation on products that we import. So food and fuel prices and US inflation are the primary impactors on inflation in Belize. Now the US themselves have plateaued and the expectation is that inflation will start coming down in this current year 2023 and going forward. So if it is that US inflation impacts on Belize’s inflation directly and significantly then if their inflation will come down then inflation in Belize will also come down. So the analysis and projections based off of that modeling indicate that inflation should come down in 2023 to under 4%, around 3.9% and then reduce even more in the medium term to around 1.2%”