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Western Hemisphere > Belize

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Cover Policy Papers
Debt for Development Swaps: An Approach Framework
International Monetary Fund. Strategy, Policy, & Review Department
and
World Bank
The aim of this note is to help stakeholders optimize their decision-making on when, where, and how to use debt-for-development swaps (“debt swaps”), ensuring they bring the intended benefits to all parties involved. It also proposes new approaches to structure these mechanisms, making them less transaction-heavy and more sustainable while maintaining accountability for fulfilling policy and spending commitments. Debt swaps are agreements between a government and one or more of its creditors to replace existing sovereign debt with one or more liabilities1 that include a spending commitment towards a specific development goal. These goals may include nature conservation, climate action, education, nutrition, support for refugees, among others. The spending commitment is often associated with the country's decision to pursue an important development policy.
Keywords:
spending commitment; expenditure efficiency perspective; transparency policy; expenditure program commitment; expenditure commitment; debt sustainability prospect; debt amortization profile; Debt conversion; Debt service; Debt management; Debt sustainability; Global
Cover IMF Staff Country Reports
Belize: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
This 2023 Article IV Consultation discusses that economic activity has rebounded strongly from the pandemic in Belize. After growing by 15 percent in 2021 and 12 percent in 2022, real GDP is projected to grow by 2.4 percent in 2023 and 2.0 percent over the medium term as spare capacity is exhausted. The key policy priorities include reducing public debt to a level that provides sufficient buffers, increasing expenditure in priority areas, implementing growth enhancing structural reforms, and building resilience to climate change. These policies would boost growth and make it more inclusive. Boosting potential growth requires enhancing access to domestic credit, ensuring predictable access to foreign exchange to attract foreign direct investment, reducing crime, and adopting a disaster resilience strategy that strengthens structural, financial, and post-disaster resilience and is based on a multi-year macro-fiscal framework. Strengthening the sustainability of the currency peg requires implementing additional fiscal consolidation and growth-enhancing structural reforms, as well as limiting government financing by the Central Bank.
Keywords:
authorities of Belize; currency peg; authorities project growth; terrorism financing risk; reform agenda; Fiscal stance; Public sector; Global; Caribbean
Cover IMF Staff Country Reports
Belize: 2022 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
The COVID-19 pandemic had a severe impact on Belize in 2020, leading to a 16.7 percent contraction in real GDP and a rise in public debt to an unsustainable level of 133 percent of GDP. To address this situation, the government presented a medium-term plan to lower public debt to 85 percent of GDP in 2025 and 70 percent in 2030 by implementing fiscal consolidation, structural reforms, and debt restructuring. Significant progress towards restoring debt sustainability was made in 2021.
Keywords:
expenditure measure; PFM legislation; policy priority; calendar year GDP; central bank of Belize; Policy discussion; IMF team; Fiscal consolidation; Fiscal stance; Global; Caribbean
Cover IMF Working Papers
Back to the Future: Fiscal Rules for Regaining Sustainability
Mr. Serhan Cevik
This paper assesses the cyclicality and sustainability of fiscal policy in Belize and applies a stochastic simulation model to determine the optimal set of fiscal rules. The empirical analysis shows that fiscal policy in Belize has been significantly procyclical and unsustainable much of the period since 1976. While the government’s recent commitment to maintain a primary surplus of at least 2 percent of GDP until 2021 is supporting debt reduction, stochastic simulations indicate that further improvement in the primary balance is necessary to reliably bring the debt-to-GDP ratio to a sustainable path. Given Belize’s history of large economic shocks, this paper proposes explicit fiscal rules designed for countercyclical policy and debt sustainability. It recommends integrating such rules into a well-designed fiscal responsibility law and establishing an independent fiscal council to improve accountability and transparency.
Keywords:
WP; government; debt ratio; budget constraint; cyclically-adjusted government expenditure; Fiscal policy; sustainability; procyclicality; debt; fiscal rules; debt accumulation equation; government's fiscal policy; fiscal policy cyclicality; Fiscal stance; Caribbean
Cover IMF Staff Country Reports
Belize: 2018 Article IV Consultation-Press Release; Staff Report; Informational Annex; Debit Sustainability Analysis and Statement by the Executive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
Belize’s economic growth has slowed over the last five years, following decades of outperforming regional peers. As in other countries in the region, a central challenge is exiting the cycle of low growth and elevated public debt. Belize’s 2017 debt rescheduling provided cash flow relief. In March 2017, the government reached a restructuring agreement with private external bondholders on its US$526 million bond (about 30 percent of GDP).1 As part of the agreement, the authorities committed to tighten the fiscal stance by 3.0 percentage points in FY2017/18 and to maintain a primary surplus of 2.0 percent of GDP for the subsequent three years. The authorities are delivering on these commitments and have made progress in implementing recent Article IV recommendations (Annex I).
Keywords:
ISCR; CR; IMF-World Bank Climate Change Policy Assessment; policy priority; IMF staff estimate; liability positions vis-à-vis nonresident; growth prospect; Fiscal stance; Anti-money laundering and combating the financing of terrorism (AML/CFT); Public sector; Caribbean; Global
Cover IMF Staff Country Reports
Belize: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Excutive Director for Belize
International Monetary Fund. Western Hemisphere Dept.
This 2016 Article IV Consultation highlights that the economy of Belize is facing multiple challenges. GDP growth slowed to 1 percent in 2015 owing to falling oil production and reduced output in the primary commodity sectors, and turned to negative 1.5 percent in the first half of 2016 relative to the same period in 2015. The decline in oil and other commodity prices led to deflation in 2015. GDP is projected to decline by 1.5 percent in 2016. The current account deficit would slowly improve owing to a gradual recovery in major commodity exports, but would remain high, indicating a weak external position.
Keywords:
ISCR; CR; tax clearance certificate; tax clearance requirement; certificate; income tax tax office; staff appraisal; BTL share; Fiscal stance; Public sector; Global; Caribbean
Cover IMF Staff Country Reports
Belize: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Director for Belize
International Monetary Fund. Western Hemisphere Dept.
This paper discusses key issues of the Belize economy. The economic condition of Belize is characterized by sluggish growth and a weak fiscal stance, which have put public debt on an unsustainable path. Social and poverty challenges remain significant. The unemployment rate remains high compared with its 2008 level of 8 percent, despite a reduction to 12.1 percent in September 2014 from 14.2 percent in September 2013. Per capita GDP remains far below its regional peers. This paper also focuses on measures that would signal credible commitment to fiscal consolidation, strengthen the financial system, and boost economic, growth taking into account constraints on human and financial resources.
Keywords:
ISCR; CR; Bel share; financing; Bel valuation; deficit; nationalization liability; growth elasticity; Bel settlement; debt level; government of Belize; BTL settlement; debt trajectory; headline inflation; Fiscal stance; International reserves; Caribbean; Global
Cover Caribbean Renewal
Caribbean Renewal
Tackling Fiscal and Debt Challenges
Charles Amo Yartey
and
Ms. Therese Turner-Jones

Abstract

Caribbean economies face high and rising debt-to-GDP ratios that jeopardize prospects for medium-term debt sustainability and growth. This book provides a comprehensive analysis of the challenges of fiscal consolidation and debt reduction in the Caribbean. It examines the problem of high debt in the region and discusses policy options for improving debt sustainability, including fiscal consolidation, robust growth, and structural reforms. The book also examines empirically the factors underlying global large debt reduction episodes to draw important policy lessons for the Caribbean. It also reviews the literature on successful fiscal consolidation experiences and provides an overview of past and current consolidation efforts in the Caribbean. The book concludes that the region needs a broad and sustained package of reforms to reduce debt ratios to more manageable levels and strengthen economic resilience.

Keywords:
BOOK; spending multiplier; debt restructuring; debt accumulation; debt level; debt reduction; commodity-exporting country; Fiscal consolidation; Debt reduction; Fiscal rules; Caribbean; Global; Africa; Europe
Cover IMF Staff Country Reports
Belize: Staff Report for the 2011 Article IV Consultation
International Monetary Fund
The 2011 Article IV Consultation report concludes that Belize has weathered the financial crisis relatively well when compared with Caribbean Community peers. Executive Directors have commended the authorities for their macroeconomic management, which enabled Belize to weather the financial crisis. Although the near-term outlook is positive, challenges arise from the uncertain global environment, rising gross financing needs of the public sector, and the weak investment climate. Directors have emphasized the need to tighten further the fiscal stance and rebuild macroeconomic buffers.
Keywords:
ISCR; CR; current account; financing; Belize; GDP; financing needs; private sector; fiscal policy; central bank; sensitivity analysis; credit bureau; banking sector; debt service; export credit; medium outlook; Caribbean; Global
Cover IMF Staff Country Reports
Belize: 2009 Article IV Consultation: Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Belize
International Monetary Fund
Belize’s economy is projected to decelerate in 2009 owing to the global downturn. Real GDP growth is projected at 1 percent, reflecting the impact of declining tourism, remittances, and foreign direct investment inflows. Executive Directors have welcomed the broadly favorable economic performance in 2008, and have commended the authorities’ commitment to pursue sound macroeconomic and financial sector policies to manage near-term risks. Directors have also emphasized that strong macroeconomic policies are necessary to underpin this exchange rate regime and help raise international reserves to a comfortable level.
Keywords:
ISCR; CR; inflation; authority; Belize; deficit; price inflation; Belize authorities; debt restructuring agreement; Belize well; revenue side; Public sector; International reserves; Oil; gas and mining taxes; Global