By Benjamin Flowers
While a country’s Gross Domestic Product (GDP) is one of the most popular methods of indicating economic performance, Senator for the Private Sector, Mark Lizarraga, contends that it does not give an accurate picture of the economic impact.
GDP growth is calculated by taking performance, or lack there of, of all of a country’s productive sectors and comparing it to the previous year. This, Lizarraga explains, does not indicate how the economic growth has benefitted a country’s citizens.
“We’ve seen instances where GDP goes up, and poverty goes up behind it”, Lizarraga said.
“When measuring economic growth you’ll need an indicator that says how much the poverty level has decreased.”
While Belize has recorded GDP growths that have exceeded expectations in previous years, the data suggests that the economic growth is having little impact on poverty.
Prime Minister Dean Barrow, at the reading of the national budget, explained that in 2014, Belize saw GDP growth of 3.6 percent, and that the Central Bank estimates GDP growth at between 2.0 and 2.5 percent for 2015. However, according to data from the Statistical Institute of Belize, poverty in Belize is at 41.3 percent.
Regionally, poverty affected 28 percent of Latin America’s population in 2014, according to the Economic Commission for Latin America and the Caribbean (ECLAC) based in Santiago, Chile. ECLAC also highlighted that indigence (extreme poverty) rose from 11.3 percent in 2012 to 12 percent in 2014.
Other popular economic indicators include: GDP per capita, which measures the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country; Gross National Income (GNI), which measures income received by a country both domestically and from overseas; and Net National Income, which encompasses the income of households, businesses and the government.