BELIZE CITY, Mon. Feb. 28, 2022– As was reported in last Friday’s issue of the AMANDALA, the International Monetary Fund (IMF) released its preliminary findings after the conclusion of the Article IV Consultation visit to Belize. The IMF’s mission to Belize involved a review by a group of its staff members who visited Belize of a number of fiscal and economic indicators related to the current state of the country’s finances. The findings, titled “Staff Concluding Statement of the 2022 Article IV Mission”, make note of Belize’s robust economic recovery and paint a much brighter picture of the country’s overall fiscal health in comparison to 2021’s bleak assessment, which had even sparked rumors of a possible devaluation.

According to the Concluding Statement, while the COVID-19 pandemic has had a severe impact on Belize—as reflected in the 16.7% contraction in GDP and increase in public debt in 2020—the Government of Belize has made significant progress towards reducing public debt. The Statement also notes that the country’s GDP is projected to grow by 6.5% in 2022. The IMF attributes this growth in GDP to “a rebound of activity in the construction, retail and wholesale trade, transport and communication, and tourism sectors.”

The Statement also pointed out that one significant risk to the outlook of Belize’s economy is the potential for escalation of the pandemic through the emergence of new variants which could derail the recovery of tourism. On a positive note, however, the IMF stated that vaccinations may help curb this risk. Other key risks to economic recovery listed by the IMF included natural disasters, due to Belize’s vulnerability to climate change and extreme weather, tightening of global financial conditions which could lead to high cost of external financing, as well as a further rise in inflation due to increased international energy and food prices.

The country has also seen a decline in public debt, which stood at 133% of GDP in 2020 and declined to 108% in 2021. It is predicted to fall to 84% of GDP by 2032. The IMF staff has recommended that the Government capitalize on this, suggesting that they attempt to reduce its debt even further, to an ambitious 60% of GDP by 2031. This recommendation, says the Concluding Statement is “to ensure that it stays below the 70 percent of GDP threshold for sustainability even when the economy is hit by shocks.”

Additionally, to achieve further fiscal consolidation, the staff recommends that authorities broaden the country’s tax base by taxing some non-necessity-zero-rated items at the standard 12.5% rate and including the hotel sector among the enterprises which pay GST, which, according to the report, could generate revenue equivalent to 1.5% of GDP by Fiscal Year 2024.

Prime Minister Hon. John Briceño commented on the IMF staff’s Concluding Statements, and said that the government is highly pleased with the extremely positive report.

“They never expected that Belize could have done so well in such a short time, and that Belize is on the path to recovery. They support the work that we’re doing, the changes we’re doing, the services we are providing people, the work on infrastructure and housing, all of that. As I mentioned to them, when they were saying they’re very happy and very pleased, but we’re not out of the woods yet, and I agree with them.”

Hon. Briceño told the media that while a potential return to a pre-COVID economy is good, it is still not enough, since, before the pandemic and under the UDP administration in 2019 the country was in recession. He further said that he would like to see the economy return to what it was in 2007, when it was showing tremendous growth.

And while the Prime Minister is pleased with the glowing reviews received from the IMF, he noted that he is also aware of the social commitment that the Government of Belize has to its people—something which he says he made sure to tell the IMF.

“Our job also has to do with people. It’s about the social services that we have to prepare; it’s not only numbers … but it’s also that we need to be able to provide housing … land, education, the National Health Insurance. These are part of the anchor of Plan Belize and that if we can implement that as quickly as possible, then we can truly, really, transform the lives of our people,” he said.