IMF forecasts 3.5% growth for Belize

THE INTERNATIONAL Monetary Fund, IMF, said that the Belize economy has continued to perform well after growing strongly by 17.9 per cent in 2021 and 8.7 per cent in 2022, and by an estimated 4.5 per cent in 2023.

The expansion has been led by the tourism, construction, retail and wholesale trade, transport, and business process outsourcing sectors.

“As a result, real GDP was 16 per cent above pre-pandemic levels in 2023 and the unemployment rate declined from 14 per cent in 2020 to 3.4 per cent in 2023,” said an IMF delegation at the end of a two-week Article IV consultation mission.

The mission led by Jaime Guajardo also concluded that Belize’s fiscal position has strengthened. Public debt fell from 103 per cent of GDP in 2020 to 66 per cent in 2023, driven by strong nominal GDP growth, a substantial improvement i n the primary fiscal balance, a debt-for-marine protection swap with The Nature Conservancy, and a discount in Belize’s PetroCaribe oil debt with Venezuela.

The I MF is predicting that real GDP growth is projected to moderate going forward. It said growth is projected at 3.5 per cent in 2024 and 2.5 per cent from 2025 onwards as tourist arrivals return to pre-pandemic levels and the output gap closes.

The unemployment rate is projected to stay at 3.4 per cent over the medium term “as the economy remains at full employment, while inflation projected is to decelerate further, from 4.4 per cent in 2023 to 3.1 per cent in 2024, and 1.3 per cent over the medium term”.

The IMF delegation said that the fiscal position is projected to remain robust, but debt dynamics have become more difficult.

“Public debt is projected to decline more slowly going forward, given the projected moderation in growth and still-high global interest rates, remaining above 50 per cent of GDP over the next decade.”