BELIZE CITY, Fri. Dec. 13, 2019– The International Monetary Fund (IMF) has released its final Article IV Consultation with Belize, which was completed on November 12 and was published on December 9 by the IMF Executive Board.

The report says that Belize’s economic recovery has slowed down after registering a 3.2 growth in real GDP for 2018.

“Growth for 2019, on a whole, has been projected to one and a half percent, while the current account deficit remains large in 2018 at 7.9 percent of GDP”, stated the report.

The press release which summarizes the report also noted that the financial sector is stable and that “government implemented significant fiscal consolidation over the past two years, but the primary fiscal surplus is expected to narrow this year and remain below 2 percent of GDP for the following two years.”

Public debt remains elevated at above 90 percent of GDP, said the IMF, which noted that Belize is vulnerable to weaker US growth, which could impact tourism, as well as higher oil prices and weather-induced natural disasters.

“Violent crime poses risks to growth, competitiveness and macroeconomic stability,” the IMF said.

The IMF also noted that Belize’s financial system remains vulnerable to a loss of CBRs
(Corresponding Banking Regulation). “The government continues to contest legacy claims which could lead to large public financing needs,” it said.

Structural reform could further raise investment, income and employment, the IMF said.

The IMF Executive Directors commended the Belizean authorities “for the efforts to enhance Belize’s policy and regulatory frameworks,” noting “the historically low unemployment and zero inflation.”

Belize continues to face challenges, which include its high public debt and external imbalances, modest potential growth and its vulnerability to natural disasters and climate change, the IMF noted.

The IMF called for fiscal consolidation over the medium term to ensure Belize’s external stability and debt sustainability.

The IMF’s advice to government is to broaden its tax base and to phase out tax exemption and tax incentives, restrain current spending, including through the wage bill and pension reforms, and improve the efficiency of spending through public financial management reforms.

Feature photo: IMF “Headquarters 1” in Washington, D.C.