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IMF Reports Economic Growth for 2014 in Belize

A ten day visit by the International Monetary Fund (IMF) concluded last Friday in Belize.  During that visit, discussions were held regarding the country’s 2015 Article Four Consultation.  The IMF team was led by Jacques Bouhga-Hagbe and upon conclusion, he prepared a statement, saying, in part, quote, “Growth accelerated to 3.6 percent in 2014 from 1.5 percent in 2013 on the back of a rebound in agriculture, and strong performances in tourism, electricity, construction and services. The fall in international oil and food prices has pushed down headline inflation as of December 2014. Despite strong tourism receipts, falling exports, particularly of crude petroleum, and relatively strong imports widened the external current account deficit to 7.6 percent of GDP in 2014, up from 4.4 percent of GDP in 2013. Nevertheless, PetroCaribe and other official disbursements continued to finance the current account deficit and help build international reserves. The fiscal primary deficit increased to 1.5 percent of GDP in Financial Year 2014/2015. Although revenue collection remained in line with budget targets, spending continued to grow well above budget targets, driven by Petro Caribe-financed spending.”  End of quote.  The statement went on to read, quote, “The mission noted that significant downside risks to the economic outlook deserve close monitoring, including a protracted period of weak growth in advanced and emerging economies, complications with PetroCaribe financing, and the expected drop in sugar prices after the EU sugar reform takes full effect in 2017. On the upside, low international oil prices and growth-enhancing projects that are being implemented or envisaged could mitigate these risks.  In this context, the mission stressed the benefits of a more ambitious fiscal stance that would create the policy buffers needed to help contain downside risks. Current efforts to strengthen the financial system should continue. Vigorous structural reforms, including greater flexibility in labor and other domestic markets, greater liberalization of the economy, simplification of procedures to start a new business and register property, and quicker resolution of contract disputes, would foster Belize’s competitiveness and raise GDP growth.”  End of quote.  Whilst in Belize, the IMF team met with Prime Minister Dean Barrow, Financial Secretary Joseph Waight, Central Bank Governor Glenford Ysaguirre, other government and central bank officials, representatives of the private sector, labor unions, sugar farmers and members of the opposition.