"IMF hails Belize as poster child for economic rebound with consecutive years of GDP growth"
By: Omar Silva, NP Staff Writer
Belize City: Wednesday, 10th May 2023
It is possible for Belize's GDP to expand for two consecutive years despite being a consumer-driven nation with high global importation costs and a population that is experiencing inflation-driven costs of living. The IMF report acknowledges that Belize's economy contracted by 13.4% in 2020 but rebounded with a 15.2% GDP growth in 2021 and a 12.1% growth in 2022. The report also notes that the government's homegrown economic plan is yielding positive results, with Belize being considered a "poster child" for a massive rebound.
One reason for this rebound is that Belize has successfully reduced its debt to GDP ratio from 133% to 64%, which the IMF finds impressive. The government achieved this through a debt-for-nature swap and a discount on Petrocaribe payments from Venezuela. The IMF report does note that there has been a drastic increase in inflation, from near zero in 2020 to more than six percent in 2022, despite the government fixing fuel prices. However, the IMF predicts that the inflation rate will fall this year.
The IMF does have recommendations for Belize to continue its economic growth, including enhancing revenues, reprioritizing expenditures, increasing priority spending on infrastructure, targeted social programs, and crime prevention, and easing access to credit for micro, small, and medium-sized enterprises. The IMF also emphasizes the need for governance reforms and building resilience to climate change and related disasters.
In summary, while Belize may still be facing economic challenges such as inflation and a high cost of living, its GDP growth over the past two years and its reduced debt to GDP ratio are positive indicators of economic progress. The IMF report highlights both the accomplishments of the Briceno administration and the challenges that still lie ahead.
While Belize has made progress in its economic growth, there are still challenges that it faces. Some of these challenges include:
Inflation: As mentioned earlier, Belize has experienced a drastic increase in inflation, from near zero in 2020 to more than six percent in 2022. This could be a concern for the country's population, particularly those who are already struggling with the cost of living.
Fiscal Position: While the government has reduced its debt to GDP ratio, there are still concerns about the country's fiscal position. The IMF has called for measures to enhance revenues and reprioritize expenditures.
Climate Change and Natural Disasters: Belize is vulnerable to the impacts of climate change and natural disasters, which can have significant economic consequences. The IMF report highlights the need for building resilience to these challenges.
Access to Credit: The IMF has recommended easing access to credit for micro, small, and medium-sized enterprises, which could help spur further economic growth.
Crime Prevention: The IMF has also recommended increasing priority spending on crime prevention, which could help address concerns about crime and violence in the country.
These are just some of the challenges that Belize faces as it continues its economic growth.