General / Weekend News

IMF: Belize economic outlook “worse than envisaged”

By Alexis R. Milan, Staff Reporter

According to the International Monetary Fund (IMF) medium term outlook for economic growth for Belize “is worse than envisaged” and real gross domestic product (GDP) growth would be weaker than expected
in the near term.

The IMF recently released the results of the Article IV consultation with Belize, which was conducted in June in Washington DC.

According to the IMF, real GDP growth plummeted to 0.7 percent in 2013, from four
percent the previous year, mainly due to continued declines in oil production and weak agricultural output, especially sugarcane and
citrus.

The IMF reported that unemployment stood at 14.2 percent in September 2013 and is on an upward trend since it hit its lowest level in 2008.
It also reported that average inflation eased to 0.5 percent from 1.3 percent in 2012, as commodity price pressures went down.

“The external current account deficit widened to 4.5 per cent of GDP in 2013 up from 1.2 per cent in 2012, as exports of oil and
agricultural products fell sharply while imports of fuel and electricity picked up. International reserves improved to 4.7 months
of imports at end-March 2014, mainly owing to PetroCaribe financing and private inflows,” the IMF said.

“Credit growth and monetary policy continued to be hampered by weaknesses in the financial system,” the report added, noting that private
sector credit grew by 3.8 per cent while broad money grew by 5.2 percent.

The IMF said the banking system remained highly liquid with declining, non-performing loans (NPLs) remained high at 16.7 percent of total
loans at the end of March 2014.

“The banking system’s capital adequacy ratio (CAR) improved to 23.4 percent. The authorities stepped up their efforts to address other
weaknesses of the financial system, including the adoption of new anti-money laundering and combating the financing of terrorism legislation”, it concluded.

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