Despite PM’s ‘rave reviews’ claim, International Monetary Fund says Belize still has work to do
Posted: Thursday, February 24, 2022. 5:27 p.m. 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; Foreign Minister Eamon and other senior financial officials and other stakeholders took note of Belize’s positive gross domestic product growth (expected at 12.5%, but actually 9.8% according to Belize Statistical Institute and projected for 2022 at 6.5%). percent) and efforts to manage the national debt with the elimination of the Super Bond and the confidence of new partners like The Nature Conservancy, the World Wildlife Fund and the Millennium Challenge Corporation.
And so the Prime Minister did a bit of bragging and credit on Tuesday, telling reporters, “No one expected our government to accomplish what it did in a year and as I told them , it’s not just our job. Yes, we had the ideas and we worked very hard to make it happen, but that also included our public officials. I mean, they made huge sacrifices to be able to get us to where we are.
And he continued: “… the team leader said, you know he has never seen any country achieve what we have and I wrote down what he said word by word and I I kind of rehearsed and he said yes, you can repeat it, of how we’ve managed to turn the tide in such a short time. The point is, we’re moving the country in the right direction.
And in its concluding statement released today, a sort of preliminary report, the IMF agrees – up to a point. It recognizes “the severe impact of the COVID-19 pandemic on Belize”; welcomes the “significant progress towards the restoration of debt sustainability” and notes the “strong recovery of economic activity”, in particular a reduction in unemployment and an expected moderation in inflation; a strengthened fiscal position thanks to this recovery and fiscal consolidation measures; improvement in debt dynamics and the external position of import reserves.
Yet he warned that without additional measures, public debt “will continue to be considered unsustainable…as it will remain above typical sustainability thresholds over the next decade”, and that “external financing is expected to become scarce due to debt sustainability issues, which would worsen reserve adequacy over time.
And the IMF cited an escalation of the pandemic, tighter global financial conditions leading to higher external financing costs, continued price inflation, and the ever-unpredictable nature of natural disasters and climate change.
In a later article, we will discuss the IMF’s advice to Belize to continue on its current path.
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