{
  "title": "IMF Executive Board Concludes 2021 Article IV Consultation with Belize",
  "publication": "IMF News, June 7, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/06/07/pr21161belize-imf-executive-board-concludes-2021-article-iv-consultation",
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  "summary": "The COVID-19 pandemic hit Belize hard, with a second wave starting in June 2020 that \"left Belize with one of the highest numbers of cases and deaths per capita in the Caribbean.\"",
  "publishDate": "2021-06-07",
  "sections": [
    {
      "heading": "Pandemic impact and near-term economic shock",
      "content": "- The COVID-19 pandemic hit Belize hard, with a second wave starting in June 2020 that \"left Belize with one of the highest numbers of cases and deaths per capita in the Caribbean.\"\n- Tourist arrivals fell by 72 percent in 2020.\n- Real GDP contracted by 14.1 percent in 2020.\n- The fiscal position deteriorated: the primary deficit widened from 1.3 percent of GDP in FY2019/20 to 8.4 percent in FY2020/21.\n- Public debt increased from 97.5 percent of GDP in 2019 to 127.4 percent in 2020."
    },
    {
      "heading": "Recovery prospects and macroeconomic projections",
      "content": "- Recovery is projected to be protracted; tourist arrivals expected to pick up in late-2021 as vaccines become more widely available in advanced countries.\n- Real GDP projections (calendar year, annual percentage changes):\n  - 2020: -14.1\n  - 2021: 1.5\n  - 2022: 6.2\n  - 2023: 4.2\n  - 2024: 2.0\n- Consumer prices (average): 2018: 0.3, 2019: 0.2, 2020: 0.1.\n- Nominal GDP (BZ$ millions) projections:\n  - 2020: 3,302\n  - 2021: 3,419\n  - 2022: 3,703\n  - 2023: 3,936\n  - 2024: 4,095\n  - 2025: 4,260\n  - 2026: 4,432"
    },
    {
      "heading": "Fiscal outlook and public debt trajectory",
      "content": "- Fiscal projections (central government, percent of fiscal year GDP):\n  - Revenue and grants: 2018: 31.4, 2019: 31.5, 2020: 27.0, 2021: 28.2, 2022: 29.9, 2023: 31.3\n  - Current non-interest expenditure: 2018: 24.8, 2019: 26.0, 2020: 26.6, 2021: 24.1\n  - Interest payment: 2018: 3.3, 2019: 3.4, 2020: 1.7, 2021: 4.1, 2022: 4.0, 2023: 3.9, 2024: 3.7\n  - Capital expenditure and net lending: 2018: 4.3, 2019: 6.9, 2020: 8.9, 2021: 8.6, 2022: 7.2, 2023: 6.3\n  - Primary balance: 2018: 2.4, 2019: -1.3, 2020: -8.4, 2021: -4.5, 2022: -1.5, 2023: 0.8\n  - Overall balance: 2018: -0.9, 2019: -4.7, 2020: -10.1, 2021: -8.7, 2022: -5.6, 2023: -3.2, 2024: -3.1, 2025: -3.0, 2026: -2.9\n- Public debt projections (percent of calendar year GDP):\n  - Public debt: 2018: 96.0, 2019: 97.5, 2020: 127.4, 2021: 132.4, 2022: 128.6, 2023: 124.9, 2024: 123.2, 2025: 121.4, 2026: 119.7\n  - Domestic debt: 2018: 27.8, 2019: 28.7, 2020: 39.8, 2021: 43.7, 2022: 44.5, 2023: 44.4, 2024: 44.9, 2025: 45.8, 2026: 47.0\n  - External debt: 2018: 68.2, 2019: 68.8, 2020: 87.6, 2021: 88.7, 2022: 84.1, 2023: 80.4, 2024: 78.3, 2025: 75.7, 2026: 72.7\n  - Principal payment (percent of GDP): 2018: 7.7, 2019: 10.3, 2020: 10.1, 2021: 9.7, 2022: 9.8\n  - Domestic principal payments: 4.9, 5.1, 6.8, 6.7, 5.9, 5.8\n  - External principal payments: 2.2, 2.3, 2.6, 3.6, 3.8"
    },
    {
      "heading": "External sector and reserves",
      "content": "- External current account (percent of GDP): 2018: -8.1, 2019: -9.2, 2020: -8.0, 2021: -7.7, 2022: -7.6, 2023: -6.8\n- Gross international reserves (US$ millions): 2018: 294, 2019: 278, 2020: 348, 2021: 360, 2022: 345, 2023: 321, 2024: 276, 2025: 237, 2026: 193\n- Reserves adequacy is expected to worsen over time as external financing gradually declines, threatening the sustainability of the currency peg."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Key assessments:\n  - The pandemic produced a high number of deaths and a deep recession.\n  - The recovery is projected to be protracted and subject to large risks.\n  - Belize faces unsustainable public debt, widening external imbalances, and vulnerability to natural disasters and climate change.\n- Policy recommendations to restore debt sustainability while protecting the vulnerable:\n  - Undertake sufficient debt restructuring and ambitious fiscal consolidation anchored in a credible medium-term strategy.\n  - Rely on both revenue and expenditure measures to gradually increase the primary balance.\n  - Broaden the tax base, strengthen revenue administration, and reprioritize expenditures.\n  - Strengthen the social safety net and develop contingency plans in case downside risks materialize.\n- Structural and resilience-enhancing reforms:\n  - Implement growth-enhancing structural reforms to improve access to credit, reduce entry barriers for firms, and enhance infrastructure.\n  - Strengthen law enforcement and social programs to reduce crime.\n  - Further strengthen resilience to climate change and natural disasters, including developing a Disaster Resilience Strategy.\n- Financial sector and AML/CFT:\n  - Limit central bank financing of the government to help reduce the current account deficit, improve access to external financing, and boost reserves.\n  - Safeguard financial stability by maintaining appropriate loan classification and provisioning rules, phasing out forbearance measures and loan deferrals by banks, and strengthening prudential standards as the pandemic recedes.\n  - Strengthen the AML/CFT framework, enforce sanctions for non-compliance, and reform to mitigate risks associated with the international financial services sector."
    },
    {
      "heading": "Selected social and economic indicators (highlights)",
      "content": "- Area (sq.km.): 22,860\n- Population (thousands), September 2020: 421.5\n- GDP per capita, (current US$), 2020: 3,917\n- Unemployment rate (percent), September, 2020: 13.7\n- Poverty (percent of total population), 2009: 42.0\n- Life expectancy at birth (years), 2017: 70.6\n- Human development index (rank), 2017: 106\n- Under-five mortality rate (per thousand), 2017: 14.2\n\nIMF Executive Board conclusion, June 7, 2021.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- IMF COVID-19 Hub\n- Policy Tracker\n- Financial Assistance\n- Questions & Answers\n- Belize and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/06/07/pr21161belize-imf-executive-board-concludes-2021-article-iv-consultation"
    }
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    "Published: June 7, 2021",
    "The COVID-19 pandemic hit Belize hard, with a second wave starting in June 2020 that \"left Belize with one of the highest numbers of cases and deaths per capita in the Caribbean.\"",
    "Tourist arrivals fell by 72 percent in 2020.",
    "Real GDP contracted by 14.1 percent in 2020.",
    "The fiscal position deteriorated: the primary deficit widened from 1.3 percent of GDP in FY2019/20 to 8.4 percent in FY2020/21.",
    "Public debt increased from 97.5 percent of GDP in 2019 to 127.4 percent in 2020.",
    "Recovery is projected to be protracted; tourist arrivals expected to pick up in late-2021 as vaccines become more widely available in advanced countries.",
    "Real GDP projections (calendar year, annual percentage changes):",
    "Consumer prices (average): 2018: 0.3, 2019: 0.2, 2020: 0.1.",
    "Nominal GDP (BZ$ millions) projections:",
    "Fiscal projections (central government, percent of fiscal year GDP):",
    "Public debt projections (percent of calendar year GDP):",
    "External current account (percent of GDP): 2018: -8.1, 2019: -9.2, 2020: -8.0, 2021: -7.7, 2022: -7.6, 2023: -6.8",
    "Gross international reserves (US$ millions): 2018: 294, 2019: 278, 2020: 348, 2021: 360, 2022: 345, 2023: 321, 2024: 276, 2025: 237, 2026: 193",
    "Reserves adequacy is expected to worsen over time as external financing gradually declines, threatening the sustainability of the currency peg.",
    "Key assessments:",
    "Policy recommendations to restore debt sustainability while protecting the vulnerable:",
    "Structural and resilience-enhancing reforms:",
    "Financial sector and AML/CFT:",
    "Area (sq.km.): 22,860",
    "Population (thousands), September 2020: 421.5",
    "GDP per capita, (current US$), 2020: 3,917",
    "Unemployment rate (percent), September, 2020: 13.7",
    "Poverty (percent of total population), 2009: 42.0",
    "Life expectancy at birth (years), 2017: 70.6",
    "Human development index (rank), 2017: 106",
    "Under-five mortality rate (per thousand), 2017: 14.2",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19)",
    "[Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)",
    "[Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)",
    "[Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)",
    "[Belize and the IMF](http://www.imf.org/external/country/BLZ/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[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](http://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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