Ten days ago, an IMF team concluded an official 10-day visit to Belize conducting what is called an Article IV consultation. The visit was followed by the release of a preliminary statement in which the global financial institution warned that despite having renegotiated its external debt, Belize’s economy continued to face serious challenges. The IMF indicated that growth in 2017 is projected to average just under 2 percent in the medium-term, due to declining productivity, competitiveness, public investment, and further decrease in oil output. That projection is below the mandatory 3% which the Government has committed to the bondholders. Among the key issues raised by the IMF is that Belize needs further fiscal consolidation for long-term sustainability. The IMF called for a more comprehensive package to lift Belize out of high debt and low growth, and suggested that the Government take additional measures such as increasing GST to 15% and downsizing GOB’s wage bill. In response, Prime Minister Dean Barrow beat his chest proclaiming that he would not give in to the IMF and would not increase GST, but those remarks are misleading according to Opposition leader Hon. John Briceno. Briceno pointed out that while the GST rate didn’t go up in the last budget, everything else has.
Honourable John Briceno – Leader of the People’s United Party
“We are not surprised by the report of the IMF we’ve been seeing it, people have been living it every day, they see the high cost of living, they see that once the Prime minister has raised GST, he raised Environmental tax, these things have a direct impact on any and everything that you buy there is no zero rating on these issues and we know what the Prime Minister’s responds will be and that is the problem, he knows everything and because of that attitude that he has we are in such a bad state because the Prime minister acts like if he knows everything, if there was a PUP government we would not be in this position we have the people with the experience, we have the people with the ability, we have the people with the vision, to be able to turn things around so we are not surprised by the report and also we are not surprised by the Prime Minister responds you know and he will tell you we are not going to raise GST but look at fuel; we have probably right now the third highest cost of fuel in the entire North, Central and south America from Canada all the way to Chile and Argentina, I think it is only Cuba and Argentina that has a higher cost of fuel than us because the government is taxing it to death and by doing that what he is punishing the poor people and he continues to punish the productive sector and by doing that what he doesn’t realize is that he is shooting himself in the foot because with that then the economy can’t grow, a government doesn’t create jobs is the productive sector, is the private sector we need to work with them we need to find out how we can reduce their cost of doing business so that they could expand and increase sales and by doing that then they can create more jobs and by creating more jobs then the government can collect more taxes, our Prime Minister doesn’t have the sense, he and the UDP government can’t think and that is 101 economics that is the private sector that we need to work with and the private sector that create employment, it is the private sector that create these opportunities and by more employment you can collect more taxes.”
The IMF will be releasing a final statement in several months which will contain more comprehensive analysis of the country’s economy.