Prime Minister Briceno Unveils Fiscal Year 2024/2025 Budget

Prime Minister Briceno Unveils Fiscal Year 2024/2025 Budget

Prime Minister John Briceno has presented the proposed budget for the Fiscal Year 2024/2025.  The budget reading was included in today’s House of Representatives meeting, and looked at the recent findings in the IMF Report, access to grants and loans as well as taxation.  In his 80-minute presentation, Prime Minister Briceno presented on the economic performance of the country and the projected revenues and expenditures.   According to Briceno, in 2023 the slowdown of economies was observed worldwide, particularly, for occurrences in the Middle East and the war in Ukraine.  

Hon. John Briceño, Prime Minister of Belize: “I rise to present to this House and to the nation a performance report on the public finances and the Belizean economy for the fiscal year 2023-2024 and to present the national budget proposals for the new fiscal year starting 1 April 2024 through 31 March 2025. For sure, 2023 was an outstanding year for the public finances and for the economy. And the IMF’s world’s foremost multilateral examiner projects that believes it is on a path to ongoing prosperity, prolonged full employment, lower inflation and public debt and a strong Belize dollar underpinning sustainable budget cycles into the medium term. There is no precedent, I dare say, in the almost 43-year history of independent Belize where so much has been achieved in three short years. During 2023, global economic growth slowed but remained resilient amidst multiple headwinds, including the Russia-Ukraine war, higher cost of living, tighter financial conditions and extreme weather events. The IMF projected that global economic activities slowed to 3.0% in 2023 from 3.5% in 2022. For 2024, the IMF expects global growth to remain steady at 3.1%. Global inflation, a critical concern in these post-COVID years, is expected to ease during 2024 due to resolved supply-side issues and still tight monetary policies. However, the threat of new commodity price spikes still looms, owing to the continued geopolitical tensions and possible weather shocks. According to the Caribbean Development Bank, economic growth in the Caribbean region also slowed down in 2023, growing by 5.7% compared to 10.3% in 2022. This figure, an average for the region, is severely bloated by Guyana’s 40% growth rate, fueled by that country’s petroleum bonanza. Despite the ongoing tourism recovery, the regional deceleration was mainly attributed to spillover effects from a weaker external environment and the impact on natural disasters. Growing projections for the region indicates an acceleration to 7.6% in 2024, again in no small part due to Guyana’s 35% projected growth.”

In relation to grants and revenues, the government says they are anticipating one billion, four hundred and thirty-eight million, seven hundred and fifty-six thousand, and eight hundred and seventy-six dollars.  This amount surpasses what was approved by the National Assembly.  Briceno presented a breakdown of this figure, attributing, 1.418 billion dollars to recurrent revenues; capital revenues at 6.2 million, and grants at a total of 14 point one million dollars.  In the expenditure category, a total of 1.49 billion dollars is projected for this fiscal year; while recurrent expenditures are expected to register at 1.12 billion dollars; capital expenditures at 378.2 million dollars, and amortization payments at 126.8 million dollars.  The prime minister noted that with all these figures, the country is projected to have a surplus of 75.3 million dollars.  For many, these numbers mean nothing. Perhaps the most concerning issue is the cost of living which Briceno addressed.

Hon. John Briceño, Prime Minister of Belize: “Now, Madam Speaker, let me directly address the matter of the cost of living. One of the complaints I have heard most often while visiting the Belizeans is the increase in the cost of living or inflation. As I mentioned earlier, the projection is for inflation to level off and at least not outpace increases in wages. The inescapable fact is that domestic purchasing power has been eroded by an increase in international prices. This is an issue that Cabinet has grappled with constantly. I have listened to the anguish of the Belizeans on this issue and I understand their frustration. The dollar is just not stretching the way it used to but this is not the fault of government. A recent in-depth analysis commissioned by government shows that three-quarters of the price increases Belizeans endure comes from imports. For example, government has no control over the cost of flour or fertilizer or a barrel of petroleum or steel for construction. Neither do we have control over the cost of shipping containers to Belize. What we have done to combat inflation is to put more money in the pockets of hourly wage workers. Forty-two thousand! 42,956 workers have received a $1.70 or a 51% per hour salary increase by increasing the minimum wage to $5 per hour. We have increased the regulation of price control and get public officers to ensure that we try to hold on these prices as much as possible but I’m coming to that. We reinstated the increments of public officers and we have cracked down as what we said earlier Minister of Agriculture, we have cracked down on price gouging by greedy merchants. For example, as recently as the 28th of February 35 businesses in San Pedro and Caye Caulker were handed citations by the Supplies Control Unit for pricing violation. This campaign will continue, as will our campaign to buy Belizean products to make this country more self-sufficient. The cabinet and I will continue to take every step possible to control the erosion of the purchasing power of the Belize Dollar.”

The projected budget for the incoming fiscal year shows the total revenues and grants amounting to 1.51 billion dollars.  It also projects revenues for 2024/2025 to be just under one point four billion dollars, and the year’s total expenditures to run at one point six-four billion dollars with public service wages taking a huge percent of that total.  Prime Minister Briceno opened this portion of the budget reading with the announcement that there will be no new taxes applied in the new budget.

Hon. John Briceño, Prime Minister of Belize:“Heartened by these growing expectations I will now outline the estimates of revenues and expenditures for the new financial year 2024-2025. Let me emphasize at the onset that once again, as has been the case for the last three national budgets, There are no new taxes in this budget. The Ministry of Finance projects total revenues and grants of $1.51 billion, comprised of $1.387 billion in tax revenues, $95.29 million in non-tax revenues, capital revenues of $6 million, and grants of $30 million. Revenues are comprised of $791.6 million collected from goods and services, $365.4 million collected from income and profits, $223.5 million collected from international trade and transactions accounting, and $7.17 million collected on property accounting. On the expenditure side, a total of $1.604 billion is proposed. Of this sum, approximately $1.1 billion will be recurrent spending covering wages, pensions, goods and services, subsidies and transfers, and debt service interest costs. In addition to recurrent costs, $430.7 million is programmed for capital investment during the new fiscal year, of which some $146.5 million are so-called capital three funding drawn down from the various loans and grants already approved. $130 million is the amount projected for amortization payments, that is the repayment of principal and loans already contracted. The primary surplus is projected at $30.6 million, or 0.46% of GDP, while the overall deficit is projected at $85.842 million, or 1.3% of GDP. Let me put this in perspective for all of us to better understand the purpose of each dollar government spends. 30 cents of every dollar will be for the wages of public officers. 7 cents of every dollar for public officers’ pensions. 18 cents of every dollar for operational costs to government such as utilities and transportation. 7 cents for interest on loans and the remaining 27 cents for capital expenditures, which includes the funding of all projects and programs undertaken by government. In effect, 73 cents of every dollar simply keep the machinery of governance running, leaving 27 cents of every dollar for programs and projects. Now when we took office in 2020, the percentage of total spending available for programs and projects was at 23 cents on the dollar spent. In just three years then, we have managed to shrink government’s operating costs by more than 5 percent, allowing more money to finance programs and projects that will benefit the people.

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