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Is Belize ready for almost-imminent “Stagflation”?

Stagflation: it is persistent high inflation combined with high unemployment and stagnant demand in a country’s economy. And it seems that Belize and the rest of the world is headed down that path. The World Bank says that the global economy is about to enter in a period of feeble growth and elevated inflation. This is because of the ongoing COVID-19 pandemic, which has been made worse by Russia’s invasion of the Ukraine. The World Bank wans that both middle- and low-income economies alike are at risk. Belize’s economy has not fully recovered from the economic fallout from the pandemic and if proven true, this situation puts Belize at a precarious crossroad. We asked the Public Service Minister Henry Charles Usher about how Belize is battening down the hatches and whether retrenchment will come given Belize’s public sector wage bill, estimated at roughly 700 million dollars. 

Henry Charles Usher, Minister of Public Service: “No we will not be having any retrenchment. We get a weekly briefing on the economy from the Ministry of Finance whenever we have Cabinet and we see where the economic figures are approaching and I have to say that we continue to see growth happening in the country despite all of the challenges. We continue to see revenue returning to the precovid levels, revenue collection countrywide returning to those levels. We can’t expect it to always be going up, always increasing but certainly we have to have it be sustainable. Yes we have to continue to monitor what’s happening internationally the longer this war continues in Ukraine the more of an impact it will have on basic food supply with grains, with fertilizer, with different supplies coming into the farming community and that will impact prices in retail. So I think that we have to continue to be disciplined, tighten our fiscal belt but we want to make sure that we give the Belizean people, give the public officers every availability to make sure that they are not impacted by what’s happening. But we had to make sure that we held down the price of diesel and the price of regular fuel. People are complaining about the price of premium but we just made a decision listen we can’t hold all of them down it would be too much of a financial impact on the country and there is an option if you don’t want to put premium in your vehicle you can put regular so we figured that that would be a compromise that would be accepted.”