The International Monetary Fund Staff has release preliminary findings after their visit to Belize from May 11-25, 2016. The International Monetary Fund (IMF) team was led by Jacques Bouhga-Hagbe , and at conclusion of the visit, Mr. Bouhga-Hagbe issued a statement in which he says in part that
‘The economy is slowing and fiscal and external vulnerabilities are rising.”
The statement says that the current account deficit widened to 9.8 percent of GDP as exports fell by 9 percent and imports continued to grow, partly due to investment projects. Following partial compensation payments for the two nationalized companies, international reserves fell to 4.6 months of imports in March 2016. The fiscal deficit widened to 8 percent of GDP due to a one-off payment related to a settlement of a loan to one of the nationalized companies, an increase in public sector wages and transfers, and a large overrun in capital expenditure.
“As a result, the stock of public debt climbed to 82 percent of GDP…..The economic outlook has worsened further since the 2015 Article IV Consultation and is subject to significant downside risks. Growth is projected to decline further to 0.5 percent in 2016 and average less than 2 percent in the medium term. In the absence of fiscal measures, rigid current spending would fuel high fiscal deficits and add to the already high public debt burden.”
In the statement, Bouhga-Hagbe suggests that raising the primary fiscal surplus to 4-5 percent of GDP by 2021is achievable if government broadens
“.. the tax base and implementing other tax reforms, containing the public sector wage bill, initiating a parametric reform of the public pension system and strengthening controls in multiple areas of public financial management system”.
‘ It also sites further strengthening the Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) framework. During its visit, the IMF team met with Prime Minister Dean Barrow, Financial Secretary Joseph Waight, Central Bank Governor Glenford Ysaguirre, other government and central bank officials, representatives of the private sector and members of the opposition.