Belize: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

In recent years, Belize had been showing encouraging signs of growth derived from strong tourism inflows and the external sector, particularly merchandise sales. However, as Belize is largely dependent on tourism, the country was hit hard during the 2020 recession. Nevertheless, the country managed to recover in 2021 and, according to the latest IMF forecasts, Belize registered an estimated growth in GDP of 8.5%, mainly driven by private consumption, a significant recovery in the tourism industry, and a rebound in exports. Belize's economy is expected to continue to recover in the coming years, albeit at a slower pace, with the IMF predicting a GDP growth of 5.4% for 2022 and 2.8% for 2023.

Despite boasting a revenue-to-GDP ratio that is higher than other countries in the region, Belize has a significant level of public debt, which reached an estimated 117.9% of GDP. According to the IMF, gross debt is projected to decrease to 113.9% in 2022 and 111.4% in 2023. The country's account deficit closed at an estimated 8.2% in 2021, and it is expected to remain stable in 2022 before slightly decreasing to 8.1% in 2023. Moreover, inflation stood at 3.1% in 2021, and should reach 2.5% in 2022 and 2% in 2023. In addition, foreign exchange reserves have fallen as a consequence of debt service and a decrease in foreign investment in the country. Policy, regulatory, and institutional weaknesses throughout Belize limits entrepreneurial activity and provides no cover for a weak banking sector. Tariff and non-tariff barriers, as well as corruption, also affect economic development. Hydrocarbon resources also represent half of the country’s tax revenues. In 2021, the government continued implementing measures in response to the economic crisis resulting from the COVID-19 pandemic, which included increased health spending, financial support for workers and vulnerable groups in hard-hit sectors (especially tourism) - both of which have been financed with loans from bilateral and multilateral creditors - a reduction of statutory cash reserve requirements, a government stimulus that encourages domestic banks and credit unions to provide grace periods for servicing interest and/or principal of commercial and ancillary loans, and a reduction of risk-weights for banks on loans in the tourism sector from 100% to 50%. Overall, Belize's fiscal measures to mitigate the pandemic have been effective in boosting economic activity, which has been gradually recovering.

According to the latest IMF estimates, although the unemployment rate was heavily affected by the COVID-19 pandemic and spiked to 13.7% in 2020, unemployment declined to 10.6% in 2021 and it should further decrease to 9.7% in 2022. Belize has a high GDP per capita when compared to the rest of the region. However, there are still high levels of poverty and income disparity. Belize also has a problem with violent crime, largely drug-related, and the trafficking of narcotics to the United States. On the other hand, the country has the world's second largest barrier reef, and in order to protect it, the government declared 10% of its territorial waters as protected area.

Monetary Indicators	2016	2017	2018	2019	2020
Belize Dollar (BZD) - Average Annual Exchange Rate For 1 MUR	0.06	0.06	0.06	0.06	0.05

Source: World Bank - Latest available data.

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Latest Update: February 2023