Services Sector Aids Belize’s Trade Balance Despite Widening Deficit
With Belize’s falling export revenues and high import expenses, the country’s trade deficit continues to widen. But according to the Statistical Institute of Belize, the services sector is helping close that gap. The SIB’s latest external trade bulletin shows that Belize’s import expenditure, while they were slightly down, still totaled over two-point-two billion dollars for the period January to October 2023. Meanwhile, import revenues only totaled three hundred and sixty-one million for the same period. Tiffany Vasquez, A statistician with the SIB, explained how the services sector, particularly tourism and the BPO’s are helping to offset the widening gap.
Tiffany Vasquez, Statistician 2: “If we were to extract one thought from everything that we have seen so far it would be with imports rising and domestic exports falling, the natural result would be a merchandise trade deficit that’s growing. And you would be right. That is where we are now, where the merchandise trade gap has widened considerably over the last decade. But that would not be the full picture of Belize’s trade. For that, we must look at our services. Specifically the EBOPS, the Extended Balance of Payments Services Data Courtesy of the Central Bank of Belize. Let’s start with the travel account; essentially our tourism receipts. The line at the top shows the money spent by non-resident visitors or tourists that visit this country. While the line at the bottom shows what Belizeans spend abroad for tourism purposes. And from the disparity between the two, it is clear that tourism brings significant foreign exchange into this country making this the greatest contributor to our trading services. Another important contributor is the communication, computer and information services account which captures the BPOs and is the main driver of this account. This graph shows that revenues from this industry has skyrocketed over the last few years. Now having seen a couple key contributors, let’s look at total services as captured in the EBOPs. From this we see that we are in a definite surplus when it comes to our services as foreign exchange earnings, the line at the top, far surpass that of foreign exchange payments, the line at the bottom. If we compare our merchandise trade deficit with the net inflows from our services, or simply our services surplus, we see that in 2010 while the merchandise trade deficit was approximately $480 million that same year net inflows from services so that $350 million. In 2022, while the merchandise trade deficit stood at $1.8 billion this was counteracted by the revenues from services valuing just over $1 billion. So it can be stated that our trading services from what we can gather from the EBOPs partially compensates for our growing merchandise trade deficit.”