IMF sees better days for Belize

A ten day visit by the International Monetary Fund ended on Thursday and a statement has been released by the Mission Chief for Belize, Gerardo Peraza. It starts with the news that in comparison to other Caribbean countries, Belize has weathered well the global economic crisis. The IMF reports an increase in the country’s output for 2010, which is attributed to electricity, wholesale and retail trade. It also notes that inflation for 2010 was at zero and has since risen slightly to point nine percent. There is also potential for growth in 2011 with the expansion of the manufacturing and agriculture sectors as well as improved terms of trade to stabilize foreign reserves. Belize, however, continues to face financial difficulties caused by nonperforming loans, high public debt and growing concerns in the business community. According to the release, the discussions were focused on three critical policy challenges; the first was achieving fiscal consolidation and gradual debt reduction.

The IMF mission says that GOB needs a stronger fiscal stance to reduce its dependence on grants and oil revenues. It also emphasizes the need to the protect public sector balance in light of recent nationalizations and to develop a plan of action to mitigate contingent fiscal liabilities. The second policy challenge is safeguarding financial and monetary stability. On the subject of growth and poverty, the report says that government is making strides by working with the private sector to identify specific measures to improve the business environment, which is critical to support long-term investment and poverty reduction, but there is still a lot to be done. The government says that the IMF report is favorable.