## Belize: Staff Report for the 2014 Article IV Consultation

_IMF Staff Country Reports, September 17, 2014_

## Source details

**Canonical URL:** [Belize: Staff Report for the 2014 Article IV Consultation](https://www.imf.org/en/publications/cr/issues/2016/12/31/belize-staff-report-for-the-2014-article-iv-consultation-41914)

## Other formats

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## Bibliographic details
- Published: September 17, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498311724.002

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### 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).*

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## Content in this bundle

- **Belize: 2014 Article IV Consultation--Staff Report; Press Release**
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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/belize-staff-report-for-the-2014-article-iv-consultation-41914_