Big up for Belize from IMF Inflation at 0 in 2010 Print E-mail
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Thursday, 01 September 2011 00:00

The International Monetary Fund (IMF)was in Belize from August 15th to the 25th and after it concluded its work in the country it issued a statement on the economic health of the nation. To the surprise of no one the IMF issued a favorable statement in which in recognized Belize as one of very few countries which was and is still able to withstand the negative effects of the global economic crisis.

In its statement the IMF noted that:“Belize weathered the financial crisis relatively well, when compared with other countries in the Caribbean Community.” But more than just weathering the global financial crisis the IMF states that inflation for the year 2010 was zero and went up by a mere .9 percent in February of 2011. These figures can be directly attributed to government’s economic policies which include assistance to the productive sector to reduce expenditure in an effort to not increase the cost of products to the Belizean public. Also included is the removal of GST from certain commodities consumed by Belizeans and the raising of the income tax threshold. 

Along with direct measures to keep inflation under control, there was also significant output in 2010 to activity in electricity, and wholesale and retail trade. The report also cites that “Growth in 2011 is being supported by expansion in the manufacturing and agriculture sectors, as well as an improvement in the terms of trade, allowing the stabilization of the foreign reserves cover at about 3 months imports of goods and services.”

The IMF’s statement also points to areas where improvement is needed and these include fiscal consolidation,gradual debt reduction, safeguarding financial and monetary stability, boosting growth and reducing poverty.With respect to boosting growth and reducing poverty, the IMF states, “The government is working with the private sector to identify specific measures toimprove the business environment, which is crucial to support long-term investment and poverty reduction.”

The statement also notes that the IMF supports the Belize authorities’ plan to use the Financial Sector  Assessment Programme as an opportunity to rebuild momentum forthe financial sector, and that the IMF stands ready to offer technical assistance in advancing the reforms recommended.

The IMF team is now expected to prepare a staff report that will be discussed by the IMF Executive Board in late October.