BELIZE CITY–The International Monetary Fund (IMF) released its latest assessment of Belize this evening, and its executive board’s assessment calls on the Government of Belize to trigger “a vigorous policy response” to what the IMF describes as Belize’s weakened macroeconomic performance, “on the back of decelerating growth and increasing fiscal and external imbalances.”
The IMF is calling for “strong measures” which it said “are necessary to moderate goods and services and wage-related outlays, reform the public employees’ pension system, and broaden the base for the general sales tax.”
Prime Minister and Minister of Finance Dean Barrow told Amandala, when we asked him for a response to the IMF assessment, that he knows what the report is that went to the board, but added that Belize will continue to grow, and grow its own way.
According to the IMF, Belize’s real GDP growth plummeted to 0.7% in 2013 from 4% in 2012, mainly due to continued declines in oil production and weak agricultural output, especially of sugarcane and citrus.
The IMF report said, though, that revenue is expected to be better-than-budgeted due to “robust tax revenues,” which more than offset the decline in non-tax revenues.
It said that “substantial increases in wages and salaries, transfers and interest payments drove up current expenditure,” while capital expenditures were higher than budgeted due to infrastructure works to repair damage caused by heavy rains in 2013.
However, the IMF says that, “The medium-term outlook is worse than envisaged during the 2013 Article IV consultation. Real GDP growth would be weaker than expected in the near term but hover around 2.5 percent over the medium term, as declining oil production would be partially offset by higher output of other commodity exports, tourism and construction.”
In its latest report on Belize’s economic growth, the Statistical Institute of Belize said that growth for the first half of 2013 had reached 3.7%, with an 8.7% second quarter growth offsetting a 0.4% decline in the first quarter.