IMF Report: Belize’s Economy Shows Remarkable Growth Despite Global Challenges

With Belize being a member of the International Monetary Fund (IMF), the country is scheduled to periodically undergo assessments by the fund, in accordance with the agreement with the IMF.  Just last week, a team from the IMF was in the country conducting interviews and meetings with an aim to get an idea of the state of the economy, and the policies and operations of the government.  The team released its report today and has essentially indicated that Belize has shown significant growth over the past three years.  It notes that Belize has been on a steady growth since 2021.  In 2021, the country’s economy grew by 17 point 9 percent; in 2022 economic growth was registered at 8 point 7 percent, and for 2023, the figure stood at 4 point 5 percent.  The IMF has attributed this continuous growth to tourism, construction, retail and wholesale trade, transport, and the BPO sector.  Aside from economic growth, the report also looked at the country’s public debt which has gone from 103 percent of GDP in 2020 to 66 percent in 2023.  In simple terms, this means that Belize now owes significantly less.  This is due to the debt for nature swap, known as the Blue Bond.  It is also due to the discount that Venezuela has given to Belize on the PetroCaribe monies owed, as well as improvement by the government in fiscal management.  Projections made on the country’s economy are that the growth will continue with 3 point 5 percent this year, and 2 point 5 percent next year.  It is also anticipated that tourist arrivals will return to pre-pandemic levels; and that the unemployment rate will remain at 3 point 4 percent.  As it relates to food inflation, the IMF projects that this will decline as global inflation moderates.  Interestingly, while the IMF has indicated that public debt will continue to decrease, the issue of external debt is being monitored due to the higher interest payments in global.  The IMF is reportedly also concerned over private sector credit growth.  Despite seeing a decline in non-performing loans, there is still the issue of tight liquidity, meaning the reluctance of some lending institutions to accommodate new investment capital for borrowers, and the high interest rates on loans.  The IMF noted that this could lead to limited investments, and limited GDP growth.  In the further outlook, the IMF Report says that Belize could be impacted significantly by higher food prices and food insecurity due to the ongoing war between Russia and Ukraine, and the war in the Middle East.  It also noted that, “Belize remains vulnerable to climate-related disasters, which can cause severe damages to the agriculture, energy, and tourism sectors.”  End of quote.

The team from the IMF were in Belize from February 12 to the 22nd.  The team met with government officials, including the Prime Minister; the Governor of the Central Bank and members of the private sector.  It is to be noted that the unions had rejected meeting with the team, saying that the IMF has always targeted the livelihood of the public sector workers when it comes to recommendations for cuts in expenditure.