Western Hemisphere > Belize
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IMF conducted a mission at the request of the Central Bank of Belize provided technical assistance focusing on developing a framework for the supervision of electronic money issuers in Belize. The mission reviewed existing approaches to supervising firms conducting regulated financial activities, as well as the regulatory framework and licensing practices for e-money issuers only to the extent that they influence and impact effective supervision. The mission also met with other key stakeholders from the public and private sector setting out nine key recommendations covering risk-based supervision, data collection, reconciliations, transparency, fund safeguarding, permitted investments, agents, inspection reports, and domestic collaboration.
1. Economic activity recovered strongly from the pandemic. After declining by 13.7 percent in 2020, real GDP grew by 17.9 percent in 2021 and 8.7 percent in 2022 led by tourism, construction, retail and wholesale trade, transport, and business process outsourcing. The unemployment rate fell from 13.7 percent in the second half of 2020 to 5 percent in the second half of 2022, while inflation rose from near zero in 2020 to 6.3 percent in 2022 led by higher food and fuel prices. The primary fiscal balance improved markedly from -8.3 percent of GDP in FY2020 to 1.6 percent in FY2022, in line with the strong economic recovery and a large fiscal consolidation.1 As a result of this and two debt operations, a debt for marine protection swap with The Nature Conservancy in 2021 and a discount in Belize's Petrocaribe debt with Venezuela in 2022, Belize's public debt declined sharply from 103 percent of GDP in 2020 to 67 percent in 2022.
Several shocks have increased global food prices in recent years, including dislocations caused by the COVID-19 pandemic and Russia’s invasion of Ukraine. The poor have been hurt disproportionately, prompting policymakers to implement measures to protect them. This chapter documents the recent episode of food inflation and food insecurity in Belize; overviews what policies were announced in Belize and the Caribbean during the recent cost-of-living crisis; and discusses the policies Belize could implement to protect its most vulnerable households from the threat of food insecurity going forward.
BELIZE
Belize’s ambitious reform agenda and strong economic recovery from the pandemic have restored debt sustainability, but debt dynamics have become more difficult since 2023. A well-designed fiscal rule would help Belize entrench debt sustainability and build sufficient buffers against adverse shocks. Staff recommends a rule that targets a reduction in public debt to 50 percent of GDP by 2030 by raising the primary balance from 1.2 percent of GDP in FY2023 to 2 percent from FY2025 onwards. A well-defined escape clause and an automatic adjustment mechanism can provide flexibility to respond to large adverse shocks without undermining the credibility of fiscal policy.