Belize Economic Outlook

IMF reviews Belize economy;

Key recommendations. Staff recommended a gradual increase in the primary surplus to 4½ percent of GDP, mainly through wage and pension reforms, to place the public debt on a firm downward path and reduce external financing needs. It also recommended continued actions to strengthen the financial system and welcomed improvements in the monetary policy framework. The authorities broadly agreed with the recommendations, particularly tostrengthen the banking system. They planned to seek consensus on needed fiscal reforms, but noted that, in the near term, social conditions strictly constrained the scope for fiscal consolidation.

The authorities seek to reinvigorate growth prospects and reduce the poverty
rate to 35 percent by 2013. The development plan for 2010–13 focuses on job creation and identifies sources of growth in tourism, agro-industry, and fishing. It rests on five pillars: developing small enterprises; strengthening export trade capacity; enhancing human development; addressing social dislocations and reducing crime; and managing environmental and natural disaster risk. The plan seeks to strengthen competitiveness by addressing infrastructure bottlenecks, high costs of financing, and red tape. It contains investment and social plans that will be assessed and integrated into the multiyear budget and presented to donors later this year.