The International Monetary Fund has concluded its article four consultation on Belize. The report, which was released on Monday, noted that the country’s economic recovery is likely to be prolonged. The IMF partly cites the COVID-19 pandemic as one of the factors behind its most recent assessment, despite efforts to control the situation. Tourism, Belize’s main source of income, saw a 72% drop in tourist arrivals. Add to that the drastic drop in activity in touch sensitive sectors and Belize recorded a fourteen point one percent contraction of GDP last year. Going forward, the IMF expects tourist arrivals to remain subdued, but pick up at the end of the year, as COVID-19 vaccines are believed to be widely available in local communities. developed nations. Given this, the IMF also predicts that real GDP will grow by one point five percent in 2021 – and six point two percent next year, reaching pre-pandemic levels by 2025. The Public debt, which is also a major concern for the fund, will remain high, peaking at one hundred and thirty-two percent this year and gradually declining to one hundred and eleven percent in ten years. The IMF is also concerned about the sustainability of the currency’s peg as external financing is expected to decline over time. This means that the exchange rate against the US dollar, for example, can be a bit more expensive if this situation is not dealt with adequately. Despite these risks, Belize continues to stick to its national plan rather than joining an IMF economic stimulus program. Our newsroom spoke with Economist and CEO of the Department of Economic Development, Dr Osmond Martinez. According to Martinez, the local plan could work and Belize could see the benefits in about two years.
Osmond Martinez, Ministry of Civil Service: âI am very confident that the house grow plan will be the one that will help us bounce back. I am 100% sure that within two years we will start to see this economy return to what it was in 2019. But we have a great plan for local culture. There is an economic development strategy that will be published very soon, we are working on it. One that is very careful at the same time is robust and one that we will perform well and I am sure the recovery is coming. One of the things we are going to focus on is poverty reduction, social protection, the introduction of science and technology to improve exports, reduce imports and create jobs. To enable an investor-friendly environment, to be energy self-sufficient, these are the points that we need to consider in order to move forward and have a healthy economy. I therefore fully support the local economic recovery plan. “
Among other IMF recommendations, Belize should restore debt sustainability while supporting the most vulnerable and implementing reforms to boost inclusive growth and build resilience. Belize is also urged to strengthen its resilience to climate hazards and natural disasters by developing a disaster resilience strategy. In fiscal matters, they recommend broadening the tax base, strengthening revenue administration and redefining spending priorities. Belize was also urged to adopt reforms to reduce public debt, take steps to improve access to credit, improve infrastructure, and strengthen law enforcement and social programs to reduce crime. /