Belize GDP to Grow 1%: IMF

The IMF sees Belize’s GDP growing by 1% in 2009 and inflation dropping to 2.5% from 4.5% in late 2008. The bank says Belize is vulnerable to global developments, as the economy is likely to be affected by declining tourism receipts and remittances, as well as lower FDI. It also says high external debt and relatively low external reserves limit the space for counter-cyclical policy. Belize’s budget for FY2009/10 targets a fiscal deficit of 1.8% of GDP, which will be covered with external loans. The budget, says the IMF, also incorporates a 7% increase in spending. “Over the near term, safeguarding international reserves and strengthening the oversight of the financial system are key priorities,” the IMF says. It adds that lowering debt ratios will require significant adjustments to the fiscal position starting in 2010, to reduce reliance on external borrowing and meet rising interest obligations on the private debt restructured in 2007.