What Explains the Deficit Between Imports and Exports?

Kareem Michael

While tourism remains the largest revenue earner, generating over seven hundred million dollars in foreign exchange for Belize.  Debt servicing, as well as the high cost of importation, continues to bog down the economy.  Governor Michael explains the significant deficit between the cost of goods brought into the country and the monies earned from exports.

Kareem Michael, Governor, Central Bank of Belize

“If we know that there are limited earners of foreign exchange within the country and we know that we don’t produce our own goods and services, but we have to import for us to be, for the economy to maintain a level of activity, we have to focus on managing that limited pool of foreign exchange.  Where does the foreign exchange come from?  So for the first half of the year, January to June, loan disbursements have amounted to a hundred and forty-one million Belize dollars.  Simply, guys, divide it by two and that’s the US dollars that have added to reserve.  Tourism, seven hundred and sixty-three point one million foreign direct investment, around a hundred and twenty-four point eight million [dollars in] exports, five hundred and four million.  And this includes re-exports from the commercial free zone.  Now these are the inflows side.  What drains the foreign exchange, what it is used for: debt servicing, ninety-five point nine million [dollars]; imports, one point two billion dollars for the first half of the year and several entities who are the ultimate beneficial owners and are non-residents have repatriated a sizeable amount of one hundred and twenty-four point five million.  We know SIB, in the latest statistics and press release often talks about the size of the merchandise trade deficit.  It’s clear to be seen here, imports minus your exports, that’s a huge amount that needs to be financed.”