{
  "title": "Press Release: IMF Executive Board Concludes 2013 Article IV Consultation with Belize",
  "publication": "IMF News, July 16, 2013",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13261",
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  "summary": "Date: July 16, 2013",
  "publishDate": "2013-07-16",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Date: July 16, 2013\n- Press Release No.: 13/261\n- On June 21, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belize.\n- The Belize government completed the exchange of its “super-bond” for new U.S. dollar denominated bonds due to expire in 2038, providing about US$130 million of cash-flow relief over the next 5 years.\n- Legal disputes persist over nationalization of Belize Telemedia Limited (BTL) and Belize Electricity Limited (BEL); no compensation agreement has been reached and litigation may take a few years."
    },
    {
      "heading": "Economic performance and outlook",
      "content": "- 2012 output growth estimated at 5.3 percent, driven by recovery from 2011 weather-related damages in commodity exports.\n- Inflation averaged 1.4 percent in 2012.\n- External current account deficit widened to about 1.7 percent of GDP in 2012 due to a steep drop in oil exports and higher imports of fuel and electricity.\n- International reserve coverage estimated at 3.4 months of imports in 2012, up from 3 months in 2011, aided by strong FDI inflows in the sugar sector.\n- Unemployment remains high at 16 percent.\n- Medium-term projections:\n  - Output growth expected to moderate to about 2.5 percent.\n  - Primary surplus projected at 1 percent of GDP in FY13/14.\n  - Public debt expected to decline to about 75 percent of GDP at end-2013 (reflecting a net face value haircut of 3 percent from the recent debt exchange).\n  - External current account deficit projected to widen to about 1.9 percent of GDP owing to continued deterioration in crude oil exports and rising imports.\n  - Reserve coverage projected to remain around 3 months of imports by end-2013.\n- Government may face large medium-term financing needs related to compensation to former shareholders of nationalized companies, pending legal rulings."
    },
    {
      "heading": "Fiscal outcomes and public debt",
      "content": "- Fiscal primary surplus for FY2012/13 expected to deteriorate to 1.3 percent of GDP compared to 2.3 percent of GDP in 2011; deterioration reflects decline in oil-related revenues and an increase in the wage bill despite robust GST revenue growth.\n- Key fiscal and debt numbers (from projections and historicals):\n  - Primary balance: 2.4 (2009), 1.8 (2010), 2.3 (2011), 1.3 (2012), 1.0 (2013 proj.)\n  - Overall balance: -1.7 (2009), -1.1 (2010), -0.6 (2011)\n  - Public and publicly guaranteed debt: 84.9 (2009), 85.3 (2010), 83.0 (2011), 78.6 (2012), 75.1 (2013 proj.)\n  - Domestic debt: 7.5 (2009), 12.1 (2010), 11.2 (2011), 12.2 (2012), 12.0 (2013 proj.)\n  - External debt: 77.3 (2009), 73.2 (2010), 71.8 (2011), 66.4 (2012), 63.1 (2013 proj.)"
    },
    {
      "heading": "Financial sector and monetary conditions",
      "content": "- Credit to the private sector recovered modestly in 2012 after two years of decline; growth estimated at 1.1 percent in 2012.\n- High non-performing loans (NPLs) at 20 percent of total loans at end-2012 and loan write-offs constrain private sector credit growth and erode banks’ net earnings.\n- Broad money grew by 5 percent in 2012, mostly driven by expansion in net foreign assets.\n- New provisioning and loan classification standards implemented by the central bank at end-2011 have resulted in declining NPLs and improving provisioning.\n- Directors urged continued vigilance, close monitoring of individual institutions, intensified implementation of remaining 2011 FSAP recommendations, updating the crisis management plan, and strengthening the bank restructuring and resolution framework.\n- Need identified to further strengthen the Anti Money Laundering/Combating the Financing of Terrorism framework."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors congratulated authorities on strong economic performance and the successful external debt exchange.\n- Key recommendations and assessments:\n  - Use the existing breathing space to rebuild policy buffers, pursue active debt management, accelerate financial sector reform, and bolster resilience to external shocks.\n  - Sustain fiscal consolidation momentum while protecting priority spending on infrastructure, internal security, and social programs.\n  - Raising the primary surplus to debt-sustainability-consistent levels will require strong adjustment efforts, including moderating wage increases and broadening the base for the general sales tax.\n  - Strengthen public financial management and implement tax reform that promotes growth and fairness.\n  - Avoid earmarking of funds and establish appropriate safeguards for public resources if used for creation of a specialized mortgage bank.\n  - Given uncertainties about liabilities from nationalizations and other contingent liabilities, take additional measures as necessary to ensure fiscal sustainability.\n  - Revamp the debt management framework: develop a more robust debt management institutional framework, build capacity for a medium-term debt management strategy, and explore options to develop the domestic debt market to mobilize domestic financing.\n  - Advance structural reforms to remove impediments to private investment, boost competitiveness and jobs, promote inclusiveness, and diversify exports and energy sources.\n  - Continue work on financial sector reform and crisis preparedness with IMF technical assistance as needed."
    },
    {
      "heading": "Selected economic indicators (annual / percent or levels as presented)",
      "content": "- GDP at constant prices: 0.0 (2009), 2.7 (2010), 1.9 (2011), 5.3 (2012), 2.5 (2013 proj.)\n- Nominal GDP (US$ millions): 1,339.2 (2009), 1,392.0 (2010), 1,480.8 (2011), 1,579.4 (2012), 1,636.9 (2013 proj.)\n- Gross domestic investment 1/ 2/: 22.0 (2009), 18.0 (2010), 19.0 (2011), 19.5 (2012)\n- Gross national savings 1/: 16.3 (2009), 15.2 (2010), 17.9 (2011), 17.3 (2012), 17.6 (2013 proj.)\n- Consumer prices (end of period): -0.4 (2009), 0.6 (2010), 2.0 (2011), 1.4 (2012 average reported)\n- Real effective exchange rate: 4.5 (2009), -2.8 (2010), -9.4 (2011)\n- Credit to the private sector: 4.8 (2009), -3.6 (2010), -1.2 (2011), 1.1 (2012), 2.1 (2013 proj.)\n- Money and quasi-money (M2): 5.8 (2009), -2.1 (2010), 4.7 (2011), 5.1 (2012), 3.8 (2013 proj.)\n- Central government revenue and grants (% of GDP): 27.2 (2009), 27.5 (2010), 27.8 (2011), 26.0 (2012), 26.4 (2013 proj.)\n- Central government current expenditure (% of GDP): 24.7 (2009), 24.1 (2010), 22.7 (2011)\n- Central government capital expenditure and net lending (% of GDP): 3.7 (2009), 4.6 (2010)\n- External current account (percent of GDP): -4.9 (2009), -1.9 (2010), -1.7 (2012 reported), -1.9 (2013 proj.)\n- Overall balance of payments (US$ millions): 47.3 (2009), 5.2 (2010), 18.1 (2011), 52.8 (2012), -10.0 (2013 proj.)\n- Gross international reserves (US$ millions) 5/: 213.7 (2009), 218.0 (2010), 236.1 (2011), 288.9 (2012), 272.5 (2013 proj.)\n- Reserves in months of imports: 3.3 (2009), 3.2 (2010), 3.0 (2011), 3.4 (2012), 3.1 (2013 proj.)\n\nPress Release No. 13/261, July 16, 2013, IMF Communications Department.\n\n---\n\n\n References\n\n- Belize and the IMF\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr13261"
    }
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    "Published: July 16, 2013",
    "Date: July 16, 2013",
    "Press Release No.: 13/261",
    "On June 21, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belize.",
    "The Belize government completed the exchange of its “super-bond” for new U.S. dollar denominated bonds due to expire in 2038, providing about US$130 million of cash-flow relief over the next 5 years.",
    "Legal disputes persist over nationalization of Belize Telemedia Limited (BTL) and Belize Electricity Limited (BEL); no compensation agreement has been reached and litigation may take a few years.",
    "2012 output growth estimated at 5.3 percent, driven by recovery from 2011 weather-related damages in commodity exports.",
    "Inflation averaged 1.4 percent in 2012.",
    "External current account deficit widened to about 1.7 percent of GDP in 2012 due to a steep drop in oil exports and higher imports of fuel and electricity.",
    "International reserve coverage estimated at 3.4 months of imports in 2012, up from 3 months in 2011, aided by strong FDI inflows in the sugar sector.",
    "Unemployment remains high at 16 percent.",
    "Medium-term projections:",
    "Government may face large medium-term financing needs related to compensation to former shareholders of nationalized companies, pending legal rulings.",
    "Fiscal primary surplus for FY2012/13 expected to deteriorate to 1.3 percent of GDP compared to 2.3 percent of GDP in 2011; deterioration reflects decline in oil-related revenues and an increase in the wage bill despite robust GST revenue growth.",
    "Key fiscal and debt numbers (from projections and historicals):",
    "Credit to the private sector recovered modestly in 2012 after two years of decline; growth estimated at 1.1 percent in 2012.",
    "High non-performing loans (NPLs) at 20 percent of total loans at end-2012 and loan write-offs constrain private sector credit growth and erode banks’ net earnings.",
    "Broad money grew by 5 percent in 2012, mostly driven by expansion in net foreign assets.",
    "New provisioning and loan classification standards implemented by the central bank at end-2011 have resulted in declining NPLs and improving provisioning.",
    "Directors urged continued vigilance, close monitoring of individual institutions, intensified implementation of remaining 2011 FSAP recommendations, updating the crisis management plan, and strengthening the bank restructuring and resolution framework.",
    "Need identified to further strengthen the Anti Money Laundering/Combating the Financing of Terrorism framework.",
    "Directors congratulated authorities on strong economic performance and the successful external debt exchange.",
    "Key recommendations and assessments:",
    "GDP at constant prices: 0.0 (2009), 2.7 (2010), 1.9 (2011), 5.3 (2012), 2.5 (2013 proj.)",
    "Nominal GDP (US$ millions): 1,339.2 (2009), 1,392.0 (2010), 1,480.8 (2011), 1,579.4 (2012), 1,636.9 (2013 proj.)",
    "Gross domestic investment 1/ 2/: 22.0 (2009), 18.0 (2010), 19.0 (2011), 19.5 (2012)",
    "Gross national savings 1/: 16.3 (2009), 15.2 (2010), 17.9 (2011), 17.3 (2012), 17.6 (2013 proj.)",
    "Consumer prices (end of period): -0.4 (2009), 0.6 (2010), 2.0 (2011), 1.4 (2012 average reported)",
    "Real effective exchange rate: 4.5 (2009), -2.8 (2010), -9.4 (2011)",
    "Credit to the private sector: 4.8 (2009), -3.6 (2010), -1.2 (2011), 1.1 (2012), 2.1 (2013 proj.)",
    "Money and quasi-money (M2): 5.8 (2009), -2.1 (2010), 4.7 (2011), 5.1 (2012), 3.8 (2013 proj.)",
    "Central government revenue and grants (% of GDP): 27.2 (2009), 27.5 (2010), 27.8 (2011), 26.0 (2012), 26.4 (2013 proj.)",
    "Central government current expenditure (% of GDP): 24.7 (2009), 24.1 (2010), 22.7 (2011)",
    "Central government capital expenditure and net lending (% of GDP): 3.7 (2009), 4.6 (2010)",
    "External current account (percent of GDP): -4.9 (2009), -1.9 (2010), -1.7 (2012 reported), -1.9 (2013 proj.)",
    "Overall balance of payments (US$ millions): 47.3 (2009), 5.2 (2010), 18.1 (2011), 52.8 (2012), -10.0 (2013 proj.)",
    "Gross international reserves (US$ millions) 5/: 213.7 (2009), 218.0 (2010), 236.1 (2011), 288.9 (2012), 272.5 (2013 proj.)",
    "Reserves in months of imports: 3.3 (2009), 3.2 (2010), 3.0 (2011), 3.4 (2012), 3.1 (2013 proj.)",
    "[Belize and the IMF](http://www.imf.org/external/country/BLZ/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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