Belize: Technical Assistance Report-Public Investment Management Assessment

IMF Staff Country Reports, July 22, 2020

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The level of public investment in Belize has varied over the past years in the context of existing constraints.
The sharp increase in public debt has limited available fiscal space.
There has been an increase in externally financed investments as a share of the capital budget.
There is a growing interest in public private partnerships (PPPs) to help achieve the government of Belize’s national strategy objectives.
The correlation between Belize’s public investment and GDP growth remains weak.
The public capital stock as a ratio to GDP shows a sharp deterioration, possibly pointing to investment inefficiencies.

Fiscal constraints from the sharp increase in public debt reduce the government’s capacity to finance capital projects from domestic resources.
Greater reliance on externally financed investments and PPPs may reflect efforts to sustain capital spending despite limited fiscal space.
Weak correlation between public investment and GDP growth, together with a deteriorating public capital stock ratio to GDP, suggests potential inefficiencies in project selection, execution, or maintenance.

Use of externally financed investments and PPPs to pursue national strategy objectives is a prominent feature of the investment financing mix.
The observed weak link between public investment and GDP growth and the deterioration in public capital stock ratio point to the need for addressing possible investment inefficiencies (project selection, implementation, and asset management).

Belize: Technical Assistance Report-Public Investment Management Assessment (IMF Staff Country Reports, July 22, 2020).