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Dec 3, 2015

Belize’s Economic Outlook Downgraded – From Positive to Stable

Mark Lizarraga

A recent Standard and Poor’s research affirms that Belize’s B minus, B rating has been revised to stable from positive, on what is being described as a weaker fiscal position.  That frail status is the result of shortfalls due to pre-election disbursements, as well as settlements for the B.T.L. and B.E.L. nationalizations of 2009 and 2011, respectively.  The stable forecast balances a weaker fiscal position and higher external exposure against growth potential.  It is supported by a recovery in agricultural exports, particularly sugar, and investment in tourism-related infrastructure.  The issue of the mounting deficit however, remains a serious concern for the business sector.  The Belize Chamber of Commerce and Industry, in the wake of the latest ratings, has issued a release outlining a number of concerns.  Senator Mark Lizarraga explains what the ratings mean for Belize.

 

Mark Lizarraga, Business Senator

“Our deficits have risen primarily due to pre-election spending and compensations for the public utilities that we had nationalized.  It goes on to say that Belize’s fiscal outlook has deteriorated and we expect, or Standard and Poor’s expects, that this deficit will continue to rise over the next three years.  It says fiscal slippage was largely due to higher spending like pre-election spending, the public sector wage increase and the compensation again for the utilities.  What is interesting though is that it’s making some assumptions and it’s saying that it is assuming in these projections that it is going to be allocating fifty million U.S. dollars per year for the next two years for the final compensation for BTL but that it can go as high as a hundred million U.S. each year.  So if that were to happen our position in fact would worsen.  It is also saying that it is expected that government debt will rise from seventy-four percent of GDP this year which is higher than the sixty-six percent in 2014 and it is expected to reach seventy-seven percent of GDP over the next two years.  It is also saying that, and I quote, we do not expect a significant shift in policy or a new initiative from the present UDP party that has won its third term.  It is saying that what is desperately needed, and I quote, progress remains to be done to attract more private investment and to foster competitiveness.”

 

Belize’s current account deficit has widened this year owing to lower commodity prices, weak agricultural exports, low oil prices and higher imports of capital goods.

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1 Response for “Belize’s Economic Outlook Downgraded – From Positive to Stable”

  1. islandguru says:

    Our economy would be in a much better position if the PUP did not sell out our utilities company. We are simply getting it back at a high price. The ROI will be high but it is far better than nothing at all. PUP will not get back into power no matter what!!

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