Belize: Staff Concluding Statement of the 2025 Article IV Mission
IMF News, July 11, 2025
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- Published: July 11, 2025
Mission overview
- An IMF team led by Metodij Hadzi-Vaskov held the 2025 Article IV consultation with Belize during July 1—11.
- Meetings included: Mr. John Briceño, Prime Minister; Mr. Christopher Coye, Minister of State; Mr. Joseph Waight, Financial Secretary; Mr. Kareem Michael, Governor of the Central Bank; other senior government officials, representatives of the opposition, the private sector, and labor unions.
Recent developments, outlook, and risks
- Recovery and social outcomes
- Real GDP expanded by a cumulative 27.6 percent between 2021 and 2023.
- Real GDP grew by 8.1 percent in 2024, driven by tourism, trade, and transport.
- Multidimensional poverty declined to 22 percent in 2024, from 36 percent in 2021.
- Primary fiscal balance improved to 1.7 percent of GDP in FY2024.
- Public debt fell to 61.1 percent of GDP by end-2024 from 103.3 percent of GDP in 2020, supported by a debt-for-marine protection swap and a negotiated discount on Petrocaribe debt.
- Financial stability risks have declined following accumulation of additional tier 1 capital among vulnerable banks and a decline in aggregate nonperforming loans.
- Staff’s preliminary analysis suggests Belize’s external position in 2024 was stronger than the level implied by fundamentals and desirable policies.
- Near-term outlook and medium-term baseline
- Growth is projected to decelerate to 1.5 percent in 2025.
- Growth is expected to recover in 2026 and then converge to potential of about 2 percent over the medium term.
- Staff expects inflation to decline further to 1.3 percent over the medium term.
- Public debt is expected to fall more slowly as a percentage of GDP, reflecting slower nominal growth and higher spending on salaries.
- Current account deficit is expected to moderate to about 1.2 percent of GDP over the medium term.
- Staff projects a gradual increase in international reserves to about 4 months of imports, albeit not reaching the ARA metric by 2030.
- Risks (assessed as tilted to the downside)
- External: higher global policy uncertainty, increased trade barriers, higher-for-longer global interest rates.
- Domestic: increased or sustained climate-related disasters damaging agriculture, energy, and tourism; economic slowdown raising financial sector risks.
- Upside: implementation of several large infrastructure projects (energy, utilities, transport) could push growth higher.
Policy priorities and recommendations
- Fiscal consolidation and debt reduction
- Reduce public sector debt to below 50 percent of GDP; staff advises gradually increasing the primary surplus to 2 percent of GDP by FY2026.
- Measures to support the primary surplus target:
- Greater revenue mobilization: broaden the base of the General Sales Tax, raise specific taxes and fees, and improve revenue administration.
- Reprioritization of current expenditure through reforms to the Pension Plan for Public Officials (PPPO) to reduce the present value of future deficits and lower fiscal risks.
- Expand priority spending on targeted social programs, infrastructure, and crime prevention.
- Combine adjustment with a broader medium-term fiscal strategy with clear targets and measures, improvements in public financial management, and a well-designed fiscal responsibility law with specific fiscal rules.
- Structural reforms to boost potential growth and job creation
- Labor market and skills:
- Improve intermediation services to match job seekers to vacancies, engage private sector to reduce skill mismatches, introduce legislative amendments regarding seasonal migrant workers.
- Policies to increase female labor force participation, including enhancing childcare and education.
- Tourism sector bottlenecks:
- Develop road infrastructure to ease cross-district transportation and expand flight capacity to accelerate stayover arrivals growth.
- Improve business environment and productivity:
- Reforms to improve firms’ access to finance, streamline business license and permits processes, improve tax administration, and strengthen workforce education.
- Financial sector and access to finance
- Strengthen currency peg by accumulating additional international reserves via:
- Successful structural reforms and fiscal consolidation.
- Gradual reduction in the central bank’s large stock of government securities.
- Develop domestic capital market, including introduction of a fully market-based auction for Treasury Notes.
- Improve private sector access to finance:
- Increase demand for credit: remove the regulatory 2½ percent floor on interest earned on savings deposits; support greater competition among domestic banks.
- Expand supply of credit: ensure banks have sufficient capital above regulatory requirement; operationalize the credit bureau; expand access to grants and non-debt instruments for early-stage firms.
- Operationalize the deposit insurance framework and improve coordination across regulatory agencies.
- AML/CFT and financial integrity
- Build on CFATF January 2025 assessment: continue addressing remaining shortcomings, including finalizing and approving the National Risk Assessment, enhancing risk-based supervision, and strengthening collection of beneficial ownership information.
- Disaster resilience and climate vulnerability
- Continue efforts to enhance resilience to natural disasters (rising sea levels, hurricanes, floods, droughts, coastal erosion).
- Authorities’ initiatives: plans to invest in a battery energy storage system and renewable energy; developing a Climate Finance Strategy.
- Recommendation: adopt a Disaster Resilience Strategy to complement the National Preparedness and Response Plan to guide efforts and facilitate donor coordination.
- Institutional and administrative reforms already underway
- Legislative amendments for electronic tax invoicing, new penalties for tax noncompliance, and requirement that all taxes are paid before sale of entities.
- Central bank reduced holdings of government securities and increased international reserves.
- Passage of the Fiscal Incentives Act and establishment of the collateral registry to improve firms’ access to credit.
- Central bank required vulnerable banks to accumulate additional tier 1 capital.
- Reforms to the PPPO have been delayed; authorities committed to further capacity development.
Key projections and indicators (select figures from Table 1)
- Social and demographic
- Area (sq.km.): 22,860
- Human development index (rank), 2022: 118
- Population (thousands), 2024: 410.9
- Under-five mortality rate (per thousand), 2021: 11.2
- GDP per capita, (current US$), 2023: 7,587
- Unemployment rate (percent), April 2025: 2.1
- Life expectancy at birth (years), 2021: 70.5
- Multidimensional poverty (percent of population), 2024: 22.1
- GDP growth (annual percent changes, calendar year)
- 2021: 17.7
- 2022: 9.7
- 2023: 1.1
- 2024: 8.1
- 2025 (projection): 1.5
- 2026 (projection): 2.4
- 2027 (projection): 2.2
- 2028 (projection): 2.0
- Consumer prices (end of period)
- 2021: 4.9
- 2022: 6.7
- 2023: 3.7
- 2024: 2.6
- 2025 (projection): 1.3
- 2026 (projection, average): 1.9
- Central government (percent of fiscal year GDP)
- Revenue and grants (most recent series): 22.5; 22.8; 23.2; 24.0; 24.7; 25.0
- Current non-interest expenditure (most recent series): 17.3; 16.4; 16.3; 16.2; 16.6; 17.1; 16.8
- Interest payment (most recent series): 1.7; 2.3
- Capital expenditure and net lending (most recent series): 5.2; 5.5; 7.3; 6.1; 7.4; 7.6; 6.4
- Primary balance (most recent series): 0.9; -0.5; 0.8; 0.6
- Overall balance (most recent series): -1.3; -0.8; -2.7; -1.2; -1.5; -1.8; -1.4
- Public debt (percent of calendar year GDP)
- Public debt: 82.5; 66.8; 67.2; 61.1; 60.4; 59.3; 59.1; 58.7; 58.4; 58.0
- Domestic debt: 27.2; 23.1; 24.6; 22.2; 21.6; 20.5; 20.4; 20.6; 20.9; 21.2
- External debt: 55.3; 43.7; 42.6; 38.9; 38.8; 38.7; 38.1; 37.4; 36.8
- External sector and reserves
- External current account (percent of GDP): -6.5; -8.3; -0.6
- Real effective exchange rate (+ = depreciation): -2.3; 2.8; 0.2
- Gross international reserves (US$ millions): 420; 482; 474; 498; 527; 566; 599; 637; 681; 721
- In months of imports (reserves): 3.8; 3.9; 4.0
- Memorandum items
- Output gap (percent of potential output): -5.2; -0.3; -2.4; 0.4
- Nominal GDP (BZ$ millions): 4,841; 5,693; 6,134; 6,847; 7,046; 7,356; 7,610; 7,867; 8,125; 8,392
Source: Belize: Staff Concluding Statement of the 2025 Article IV Mission — International Monetary Fund.