Belize: Staff Report for the 2014 Article IV Consultation
IMF Staff Country Reports, September 17, 2014
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- Belize: Staff Report for the 2014 Article IV Consultation
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Bibliographic details
- Published: September 17, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498311724.002
Outlook and risks
- Economy will remain vulnerable over the medium term, with:
- sluggish real GDP growth;
- rising public debt;
- widening external current account deficits.
- International reserves could decline to uncomfortably low levels.
- Financial system vulnerabilities:
- high NPLs;
- low capital buffers, especially at a systemic bank.
- Main fiscal risks:
- a court decision that could lead to a larger than expected compensation to the former owners of the nationalized companies;
- weaknesses in a systemic bank;
- the cost of the new public bank.
Focus of the Consultation
- Measures to place public debt on a sustainable path.
- Actions to address weaknesses in the financial system, particularly in a systemic bank.
- Steps to buttress external sector resilience.
- Policies to enhance competitiveness and inclusive growth.
Key policy advice
- Fiscal consolidation:
- Improve the primary fiscal balance to about 4.5 percent of GDP starting in 2015.
- Measures to achieve this include:
- allowing spending on goods and services to rise only in line with inflation;
- containing the expansion in the wage bill;
- requiring public workers to contribute to their pensions;
- widening the tax base and strengthening revenue administration.
- Active debt management, including refinancing of expensive debt with low-earning deposits (essentially from PetroCaribe), to support these efforts.
- Financial sector:
- Address banking sector vulnerabilities through improving capital buffers.
- Public financial management (PFM):
- Improve PFM to contain low-quality spending;
- strengthen budget formulation, preparation, and execution;
- improve the coverage and accuracy of budget documents.
- Structural and growth policies:
- Further improve the business environment to attract more private investment, boost competitiveness, and enhance job-creating and inclusive growth.
Implementation of staff advice
- Implementation of recent staff advice is mixed.
- The breathing room provided by the debt restructuring was not used to improve the primary fiscal balance.
- The authorities plan to review exemptions and zero-ratings under the GST.
IMF Staff Report: Belize: Staff Report for the 2014 Article IV Consultation (IMF Staff Country Reports 2014, No. 280, 71 pages, DOI: https://doi.org/10.5089/9781498311724.002).
Content in this bundle
- Belize: 2014 Article IV Consultation--Staff Report; Press Release