Belize’s economic growth lagging behind Latin America and the Caribbean

Belize’s economy barely grew enough in 2013 to catch up with the rate at which the population has been growing. In fact, Glen Avilez, Director-General of the Statistical Institute of Belize (SIB), said at a press conference in Belize City this morning that the GDP grew a mere 0.7% – the lowest rate since 2009.

This means that Belize’s gross domestic product expanded from $3 billion to roughly $3.1 billion, after the cost of living adjustments are made.

This is dismal in the regional and international context: The January 2014 World Economic Outlook published by the International Monetary Fund (IMF) said that Latin America and the Caribbean’s GDP grew by 2.6% in 2013. Belize’s growth was lagging substantially behind.

“What we have is a pie that has not grown by any significant amount – 0.7%. So we have more people that must share this pie, because it is only 0.7% larger and the population has grown by 2.6%; it means that we have less per person than we did last year. So on that basis, we are a little worse off than we were last year, given the slow rate of growth of the pie,” Avilez explained.

Buying power has also been eroded. Avilez explained that, “Our purchasing power will have been eroded by the inflation rate recorded – by 1.8%, the January estimate I just provided you…. So, yes, we are a little worse off than we were in January 2013.”

“Among food items, vegetable prices accounted for most of the increase, rising by an average of 21 percent compared to a year ago. Most notably, the average price for tomatoes more than doubled, while those for sweet peppers, cabbage, red kidney beans and black beans all rose by at least 20 percent,” the SIB said in a press release, adding that international airfares have increased by 29%.

“Belmopan and Corozal Town had the highest inflation rates. Orange Walk Town and Punta Gorda Town recorded the lowest rates,” the SIB said.

As for the wider economic profile, some sectors fared off better than others. While the fishing sector emerged as the top performer, recording a 27% growth, citrus showed the sharpest decline, with citrus concentrate production falling by 40% and whole citrus fruit production by 35%.

Crude oil production, which brought in export revenue of $160 million, was down by 23% in 2013, whereas production in the manufacturing sector declined by 12%.

There has been little diversification to buttress the economy. The only sector that has shown diversification, Avilez said, was agriculture. Specifically, the news for corn production was good. According to Avilez, last year Belize recorded an increase in corn exports, and most of this was to CARICOM – almost $30 mil in corn alone, due to an expansion of the export market for Belize.

The SIB had estimated that the GDP would grow by 2.5% in 2013; however, delays in the start of the sugar crop due to an impasse between the factory and cane farmers over payment for bagasse and deplorable road conditions which hampered cane delivery, as well as a downturn in citrus and petroleum production were among the factors that depressed economic growth.

Bad weather had a dampening effect on agricultural production, but it was good news for the electricity sector, which benefitted from more hydropower production.

As for the upshot of the GDP data, Avilez pulled the data from 2009 to 2013, which showed that each low growth year was followed by a year of higher growth; so that if the trend continues to hold, 2014 should be a better year “unless something goes terribly wrong.” He said that it would be difficult to repeat 2013’s low performance.

The SIB projects that the Belize economy would grow by about 2% this year.

According to the IMF January 2014 outlook, “Global growth is now projected to be slightly higher in 2014, at around 3.7 percent, rising to 3.9 percent in 2015.”

For Latin America and the Caribbean, the projections indicate that GDP growth would rise from 2.6% for 2013 to 3.0% in 2014—the level recorded for the region in 2012.

Further regional growth is forecast in 2015, at a projected rate of 3.3%.