IMF mission reports good news for Belize’s economy

An International Monetary Fund team has concluded a visit to Belize. It has issued a good report that we note is in contrast to forecasts in the Economic and Financial Update of June 2012.The IMF statement points out that output rebound is expected despite a decline in oil production. The June report, however, states that declining oil revenue places a heavy strain on public finances and the economy in general. The IMF also expects Gross domestic product to grow optimistically between three point five percent and four percent in 2012 while the June report says that growth is expected to be two percent. Another difference we note was in inflation figures. The IMF puts inflation at one point five percent in January to August but the most recent report from the Statistical Institute of Belize shows that inflation is surging and increased to one point seven percent in August.  According to the IMF, the current account deficit is expected to narrow to two point three percent of GDP, down from two point five percent in 2011, and this is despite the widening of the trade deficit.  In summary, the statement points out that the government’s primary surplus target of two percent of GDP is within reach, but will require close monitoring of spending for the remainder of this fiscal year. This again is in contrast to the June report which states that the effects of the negative external climate and an increase in debt levels are set to combine with declining oil revenue to place a heavy strain on public finances and the economy in general. Generally, the IMF’s report is good news and as such multilateral funds are not expected to meet any shortfalls.