The International Monetary Fund, IMF, is giving Belize not so good marks on its economic outlook. A report from the Fund reveals that and we quote, “ the IMF’s medium-term outlook for economic growth for Belize “is worse than envisaged” and that real gross domestic product (GDP) growth would be weaker than expected in the near term”, end quote. The Washington-based financial institution has concluded its Article IV consultation with Belize noting that real GDP growth plummeted to 0.7 per cent in 2013, from four per cent the previous year mainly due to continued declines in oil production and weak agricultural output, especially sugarcane and citrus. It said that unemployment stood at 14.2 per cent in September 2013 and is on an upward trend since it hit its lowest level in 2008. The IMF said average inflation eased to 0.5 per cent from 1.3 per cent in 2012, as commodity price pressures abated. It said that the primary surplus for the financial year 2013/14 is estimated to have fallen to one per cent of GDP, from 1.4 per cent of GDP in the previous financial year. Also noted by the IMF is that Belize’s revenue is expected to be better-than-budgeted, as robust tax revenues more than offset the decline in non-tax revenues.
The report said that the banking system remained highly liquid with declining, non-performing loans remained high at 16.7per cent of total loans at the ending of March 2014. The IMF warned that low primary surpluses together with the assumed recognition of debt related to nationalizations will increase the public debt-to-GDP ratio. It also noted that expansionary fiscal policies, including large wage increases, would fuel higher domestic consumption and upward pressures on the external current account deficit. International reserves could decline substantially over the medium term, especially if compensation for the nationalized companies adds to external outflows.