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February 22, 2019
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February 22, 2019

Belize’s foreign debt hovers just below 100% of GDP; average Belizean now owes approximately 9 thousand dollars

Posted: Friday, February 22, 2019. 2:07 pm CST.

By Aaron Humes: Belize continues to struggle to meet its debt obligations as according to the Government’s own figures, the national debt now hovers just below 100% of Gross Domestic Product (GDP).

As of the end of 2018, according to the Central Bank’s statistics, Government’s national debt totaled 3.58 billion Belize dollars, made up of over 2.53 billion Belize dollars in external debt and 1.05 billion Belize dollars in domestic debt. Using the estimated population of 398,000 as of June 2018, the Government of Belize owes around 9 thousand dollars (actually $8,995) on behalf of each Belizean. Government is therefore required to collect almost 30 thousand dollars in taxes over the years from a family of 4 to help pay this massive debt.

The debt stock listed by the Central Bank does not include the following:

  1. A conservative figure of 100 million Belize dollars owed by the Government for land acquisitions (Source: Amandala, 2016);
  2. An estimated 200 million Belize dollars that the Government is contesting in various legal claims (Source: IMF Country Report, November 2018), including the Universal Health Services Belize Bank claim;
  3. Moneys owed by state owned companies such as Belize Telemedia Limited (BTL) and Belize Water Services Limited (BWSL), the city and town councils across the country, or the statutory bodies such as the Belize Airport Authority (BAA);

With the gross domestic product last measured in 2018 at 3.85 billion Belize dollars in current prices according to the Central Bank’s estimate, the debt to GDP ratio hovers ever closer to 100 percent.

The majority of domestic debt is owed to the commercial banks in the form of advances and treasury notes (a combined $270 million at the end of November 2018), but other sources hold the majority of treasury notes which are more evenly distributed. The total increased by approximately 35 million dollars in the last year. Government repaid approximately 32 million dollars in interest for domestic debt.

As for external debt, the vast majority, some $1.057 billion, is owed to international commercial creditors, bundled together as “the Superbond.” Another 479 million is outstanding to the Petrocaribe initiative sponsored by Venezuela; 252 million to the Republic of China (Taiwan); and 25 million to the Kuwait Fund. Two other listed creditors – the United Kingdom and United States (through its development arm USAID) have been fully paid off for some time now. The external debt rose only marginally due to drawdowns from Taiwan and other favorite sources of funds.

On the multilateral side, while the Government has been slowly reducing its indebtedness to the Caribbean and Inter-American Development Banks, they still account for more than $500 million of Belize’s debt, with smaller amounts owed to the European Investment Bank and OPEC/OFID fund, mostly for capital projects.

Government paid out more than $162 million dollars in external debt service payments in 2018.

According to the IMF, Belize’s public debt was estimated to reach 94.2% of GDP in 2018 and if Belize was not careful with its contingent liabilities and court cases, debt to GDP ratio was expected to reach 100% in the short term. In its November 2018 report, the IMF recommended that Belize follow the path taken by Jamaica and other countries and put in place an economic reform plan to reduce the public debt to below 60% of GDP in 10 years.


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