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The IMF Says Belize’s Economy is Rebounding and Suggests GOB Raises GST

The International Monetary Fund (IMF) has issued a summary of its assessment made on Belize over the last two weeks. As we had reported, IMF representatives were meeting virtually with several government ministers, the unions and members of the private sector with an aim to get a general sense of Belize’s economic performance. In the summary provided following those meetings, the IMF has concluded that the country’s economy is recovering strongly with a real GDP projected growth of twelve-point five percent for 2021, and a further six-point five percent in 2022. The report notes that the cost of living has gone up due to the higher cost of energy on the international market, but it is projected to stabilize later this year. Despite the growth of the economy, the IMF is saying that the Briceno administration should take caution against unexpected adverse shocks by increasing the General Sales Tax, broadening the tax base, implementing taxing policies on property and capital gains as well cutting expenditures. As it relates to the public debt, the IMF confirmed that there was a decline from one hundred and thirty three percent of GDP in 2020 to one hundred and eight percent in 2021 and a projected further decline to eighty four percent by the year 2032. The report indicated, however, that “public debt would continue to be assessed as unsustainable in the absence of additional measures as it would remain above typical thresholds for sustainability over the next decade.” The IMF virtual meetings were led by Jaime Guajardo between February 10 and 22. The IMF team had met with Prime Minister John Briceno, the Central Bank Governor, Kareem Michael; Minister of State in Finance, Chris Coye; the Financial Secretary, Joseph Waight, among others officials.