{
  "title": "IMF Executive Board Concludes 2023 Article IV Consultation with Belize",
  "publication": "IMF News, May 9, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/05/09/pr23141-imf-concludes-2023-article-iv-consultation-with-belize",
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  "summary": "Economic activity has rebounded strongly from the pandemic. After contracting by 13.4 percent in 2020, real GDP expanded by 15.2 percent in 2021 and 12.1 percent in 2022, led by retail and wholesale trade, tourism, and business process outsourcing. Real GDP growth is projected to slow to 2.",
  "publishDate": "2023-05-09",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belize.\n- Economic activity rebounded strongly from the pandemic, led by retail and wholesale trade, tourism, and business process outsourcing.\n- Risks to the outlook remain tilted to the downside, including a sharp global slowdown, further increases in commodity prices, and climate-related disasters."
    },
    {
      "heading": "Growth and inflation",
      "content": "- Real GDP:\n  - Contracted by 13.4 percent in 2020.\n  - Expanded by 15.2 percent in 2021.\n  - Expanded by 12.1 percent in 2022.\n  - Projected to slow to 2.4 percent in 2023.\n  - Projected at 2 percent over the medium term as tourism returns to pre-pandemic levels.\n- Inflation:\n  - Increased from near zero in 2020 to 3.2 percent in 2021.\n  - 6.3 percent in 2022, led by higher global energy and food prices despite domestic price-fixing measures since April 2022.\n  - Projected to fall to 4.1 percent in 2023.\n  - Projected at 1.2 percent over the medium term, in line with projected fall in commodity prices and global inflation."
    },
    {
      "heading": "Fiscal position and public debt",
      "content": "- Public debt and fiscal balances:\n  - Public debt declined from 101 percent of GDP in 2020 to 64 percent of GDP in 2022, driven by the debt for marine protection swap with The Nature Conservancy, a significant reduction in the fiscal deficit, strong growth, high inflation, and a discount in the Petrocaribe debt owed to Venezuela.\n  - The primary balance rose from –8.1 percent of GDP in FY2020 to 1.2 percent of GDP in FY2022 due to expenditure containment (including a temporary 10 percent cut in public sector wages and suspension of wage increments in FY2021-22) and a strong recovery of revenue.\n  - In an unchanged policies scenario, the primary balance is projected to remain at 1.2 percent of GDP over the medium term, with public debt declining to 53 percent of GDP by 2028.\n  - Public debt is assessed as sustainable over the medium term, although with still high near-term risks.\n- Table highlights (selected):\n  - Revenue and grants (central government, percent of fiscal year GDP): 21.8 (2020), 21.7 (2021), 22.5 (2022), 22.7 (projection).\n  - Current non-interest expenditure (percent of fiscal year GDP): 20.0 (2020), 16.7 (2021), 15.4 (2022), 15.6 (projection).\n  - Capital expenditure and net lending (percent of fiscal year GDP): 10.0 (2020), 6.0 (2021), 5.9 (2022).\n  - Overall balance (percent of fiscal year GDP): -9.7 (2020), -1.3 (2021), -0.6 (2022), -0.5 (projection).\n  - Public debt (percent of calendar year GDP): 101.4 (2020), 80.1 (2021), 63.7 (2022), 60.4 (2023), 58.4 (2024), 56.9 (2025), 55.7 (2026), 54.6 (2027), 53.4 (2028).\n  - Gross international reserves (US$ millions): 349 (2020), 415 (2021), 481 (2022), 487 (2023), 494 (2024), 500 (2025), 503 (2026), 507 (2027), 513 (2028).\n  - Nominal GDP (BZ$ millions): 4,160 (2020), 4,983 (2021), 5,938 (2022), 6,332 (2023), 6,620 (2024), 6,858 (2025), 7,081 (2026), 7,310 (2027), 7,548 (2028)."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Board views:\n  - Directors agreed with the thrust of the staff appraisal and welcomed the strong recovery in economic activity and sharp reduction in public debt over the last two years.\n  - Directors highlighted that growth and inflation are projected to moderate and that risks are to the downside (sharp slowdown in advanced economies, further increases in commodity prices, climate-related disasters).\n  - Directors underscored the importance of reforms to address constraints to long-term growth and enhance resilience to shocks.\n- Fiscal policy recommendations:\n  - Continue fiscal consolidation to further reduce public debt and ensure adequate buffers to respond to adverse shocks.\n  - Enhance revenues and reprioritize expenditures, while increasing priority spending on infrastructure, targeted social programs, and crime prevention.\n  - Important measures include expanding the tax base, strengthening revenue administration, and pension reform.\n  - Improve public financial management by strengthening multi-year budget preparations, fiscal risk assessment, and public investment management.\n  - A few Directors saw merit in adopting a Fiscal Responsibility Law to enhance credibility of the fiscal framework.\n- Structural and financial sector recommendations:\n  - Growth-enhancing structural reforms should focus on easing access to credit for micro, small, and medium sized enterprises, enhancing governance, and building resilience to climate change and related disasters.\n  - Adopting a Disaster Resilience Strategy, based on a consistent multi-year macro-fiscal framework, could help unlock multilateral and donor funding.\n  - Implement planned fiscal consolidation and growth-enhancing structural reforms to reduce external imbalances, improve the adequacy of reserves, and strengthen the currency peg.\n  - Support these measures by limiting central bank financing to the government.\n  - Preserve financial stability and strengthen the AML/CFT framework; complete the update of the national assessment of Money Laundering/Terrorism Financing risks and the action plan ahead of the mutual evaluation by the Caribbean Financial Action Task Force in November 2023."
    },
    {
      "heading": "Risks and vulnerabilities",
      "content": "- Downside risks include:\n  - A sharp global slowdown.\n  - Further increases in commodity prices.\n  - Climate-related disasters.\n- Near-term vulnerabilities:\n  - Although public debt is assessed as sustainable over the medium term, near-term risks remain high.\n  - Continued vigilance recommended for banking sector risks despite authorities’ effectiveness in resolving problem loans and strengthening domestic banks' balance sheets after the pandemic.\n\nPress Release No. 23/141\n\n---\n\n\n References\n\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/2023/05/09/pr23141-imf-concludes-2023-article-iv-consultation-with-belize"
    }
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    "Published: May 9, 2023",
    "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Belize.",
    "Economic activity rebounded strongly from the pandemic, led by retail and wholesale trade, tourism, and business process outsourcing.",
    "Risks to the outlook remain tilted to the downside, including a sharp global slowdown, further increases in commodity prices, and climate-related disasters.",
    "Real GDP:",
    "Inflation:",
    "Public debt and fiscal balances:",
    "Table highlights (selected):",
    "Board views:",
    "Fiscal policy recommendations:",
    "Structural and financial sector recommendations:",
    "Downside risks include:",
    "Near-term vulnerabilities:",
    "[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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