Posted: Thursday, February 24, 2022. 5:27 pm CST.
By Aaron Humes: The International Monetary Fund (IMF) during its annual Article IV Consultation with Prime Minister John Briceno; Minister of State Christopher Coye; Minister of Foreign Affairs Eamon and other senior financial officials as well as other stakeholders, took note of Belize’s positive growth in gross domestic product (projected to be 12.5 percent, but actually 9.8 percent per the Statistical Institute of Belize and projected for 2022 to be 6.5 percent) and the efforts to manage national debt with the elimination of the Super Bond and the confidence of new partners like The Nature Conservancy, World Wildlife Fund, and the Millennium Challenge Corporation.
And so, the Prime Minister did a little boasting as well as credit on Tuesday, telling reporters, “Nobody expected our government to accomplish what it did in one year and as I told them, it is not only our work. Yes, we had the ideas and we worked very hard to get it done, but also it included our public officers. I mean, they went through tremendous sacrifice to be able to get us to where we are.”
And he continued, “…the team leader has said, you know he has never seen any country accomplished what we have and I wrote down what he said word by word and I kind of repeated and he said yes you can repeat it, of how we have managed to turn things around in such a short 12 months. The point is we are moving the country in the right direction.”
And in its Concluding Statement issued today, a sort of preliminary report, the IMF agrees – to a point. It acknowledges the “severe impact of the COVID-19 pandemic on Belize;” commends the “significant progress toward restoring debt sustainability,” and noted “strongly recovering economic activity” including a reduction in unemployment and expected moderation in inflation; a strengthened fiscal position due to this recovery and fiscal consolidation measures; improved debt dynamics and external position of import reserves.
Yet it warned that without further measures public debt “would continue to be assessed as unsustainable…as it would remain above typical thresholds for sustainability over the next decade,” and that “external financing is expected to become scarcer due to debt sustainability concerns, which would worsen reserve adequacy over time.”
And the IMF cited an escalation in the pandemic, tightening of global financial conditions leading to higher costs of external financing, continued inflation in prices and the always unpredictable nature of natural disasters and climate change.
In a subsequent story we will discuss the IMF’s advice to Belize to continue on its current path.
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