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Nov 1, 2011

IMF Report on macroeconomic state of Belize

The International Monetary Fund (IMF) has produced its latest report on Belize after consultations in August. It’s a mix of good and bad news.  The good, according to a summary of the report, is essentially that the macroeconomic outlook for 2011 remains moderately positive. Output growth is projected at two point five percent, reflecting a strong performance in the first quarter—supported by an expansion in manufacturing and electricity sectors, and a modest recovery in overnight tourist arrivals. Foreign reserves are healthy but the high deficit is projected to remain at about three percent of GDP in the context of some improvement in the terms of trade. The public debt, accrued by the Government, went up slightly from eighty-two to eighty-three percent of GDP for 2010.

The bad is that there is a weak investment climate and concern for the rise in poverty which another recent report put at forty percent. Higher food and fuel prices are expected to push inflation slightly upward. The IMF team projects that there are challenges associated with the uncertain global environment, vulnerabilities in the banking system and rising gross financing needs of the public sector. There are also concerns about non-performing loans in the banking system and that bank prudential indicators have remained weak. Against this backdrop, the IMF encouraged the authorities to strengthen the policy framework and advance the reform agenda and programs to reduce poverty. The business climate must also be strengthened to tackle Belize’s low productivity growth. It recommends a reduction in tax concessions, with improvement in overall tax collections and a containment of the wage bill as well as a streamlining of capital spending. The IMF also calls for timely compensation to former owners of nationalized entities, such as Telemedia and B.E.L., which are now entrenched in the constitution. As to stability in the financial sector, the IMF says that should be a high priority.

Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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3 Responses for “IMF Report on macroeconomic state of Belize”

  1. Storm says:

    Over the years government policies have ruined our economy, not helped it — Fonseca’s “Growth Economics” charged a billion dollars on a high interest credit card THAT OUR CHILDREN WILL HAVE TO PAY ON THEIR ENTIRE LIVES. What a cruel theft of a generation’s work!

    And all there is to show for that is secret bank accounts controlled by thieves.

    TO MOVE AHEAD, WE MUST HAVE REAL FOREIGN INVESTMENT. There is not enough capital in our poor Jewel to create the number of good jobs WE MUST HAVE. But the foreign investment must be serious and substantive, not scams and fool’s gold that we usually see.

    If we cannot create policies to attract GOOD FOREIGN INVESTMENT, then Belize will wither and die as a nation, and most likely become a department of Guatemala within a generation.

    That is our challenge as a nation — who do you trust to meet it?

  2. murphy says:

    yeah i agree we must have REAL FOREIGN INVESTMENT, but by government taking over BTL, BEL where is the foreign investment coming again. Fortis won’t bother to invest in BEL anymore; moreover no company would want to invest in a country where by the government will take certain rights from them such what Dean Barrow wants to do with the ninth amendment.

  3. Vyne says:

    With the exception of the Dickies Textile Plant, which is now gone, Belize has not seen real foreign investment in years. It is understandable that shareholders are looking to make a profit and that cannot be negated, as it is what it is; however, inherent in the term investment is development. In more modern economies, where the foreign investors hail from, regularly scheduled blackouts, particularly when foreign dignitaries or forums are coming to one’s country is unheard of. This is not a mere accusation, there was actually tracking to confirm that this was taking place, and because humans are responsible for those schedules it cannot be deemed a fallacy. In modern economies, a person should be able to pick up their home phone and be able to call their neighbor simply for having paid the base rate. 3G, other countries within the region are now boasting 4G. But really this is minor when one realizes that there are several other industries that can be explored in Belize, but who would have been interested when the utilities essential to the development of infrastructure were in the hands of those who saw it as a money making vehicle and not as the gateway for the country’s development, or maybe it was seen that way and they were merely behaving as gatekeepers.
    Belizeans are a resilient and an intelligent people, and we should give ourselves a chance to be independent to direct our own affairs and not just independent on paper.

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