BELIZE CITY, Wed. Feb. 26, 2020– Prime Minister Barrow will be leaning on all the genius that resides at the Central Bank and all of his immense oratorical skills to paint a picture of a half full glass when he faces the nation in the first week in March to make his final budget presentation to the nation. Things have not been looking good in Belize’s economy for some time, and the reports keep getting worse.
Our economy has contracted in three consecutive quarters. In the second quarter of 2019 the Statistical Institute of Belize (SIB) reported that our GDP (Gross Domestic Product) was down 0.8%, in the third quarter of 2019 it was down 0.4%, and in the fourth quarter of 2019 the fall in our GDP was 2.8%.
The SIB said that there was an 8.5% decrease in the production of bananas in the fourth quarter of 2019, when compared to production in 2018; sugar and citrus production were severely impacted by the drought, but the fishing industry was a bright light, earning $1.6 million or 14.7% more in the last quarter of 2019 than it did in the same quarter in 2018. A slight increase of overnight tourist arrivals resulted in a 1.1% increase in hotel room revenue, but fifteen fewer cruise ships came resulting in a 16.5% drop in arrivals.
January 2020 was just about the worst month we have seen in some time. The first quarter of 2020 got off terribly, and it is almost fixed that when the SIB presents its report for the first quarter of 2020, our economy will have declined four quarters in a row. The SIB said domestic exports for January 2020 was down 59.7%, and the biggest fall was sugar exports, from $17.4 million in earnings in January 2019 to $1.3 million in earnings in January 2020.
Belize’s economy fits the definition of a recession, which is what economic experts say is what is happening to an economy when the GDP declines for two or more consecutive quarters. All indications are that things will get worse before they get better. Belize’s Meteorological Department is predicting more drought for Belize in 2020, and that means that our agriculture will take a hit again and there will be less energy produced by the hydro-electrical plants in the country.
The corona virus, Covid-19, is a major concern for our health and economy, as it is in all of the world, and cases of dengue fever have been on the increase in recent years. We are facing a lot of challenges at this time and not the least of them is a government that is fascinated with high priced projects, while investing insufficiently in the people of the country.
If the recession prolongs there’ll be more unemployment and under employment, more businesses will go bankrupt because less people will be able to afford the goods they produce and sell, and more people will lose their houses because they will not be able to meet their mortgage payments.
At this time Belize is in desperate need of energetic leadership with fresh ideas to revitalize the people of our country. The budget presentation is set for next week. It will take a lot to paint a picture of a half-full glass when all the indicators are that it is half-empty.
(next week we will look at the SIB report for the last quarter of 2019 and the first month of 2020 more closely)