Belize, Highlights and Key Issues
* Growth resumed in This fall 2009 and to 3.5% in S1 this 12 months
, led by growth of 9.three% in tourism, 9.eight% in mining and manufacturing, and 21% in crude oil. However restoration is at risk from slowdown within the EU and presumably the US (main supply of a 5.eight% Q1 rise in visitors), and the pace is more likely to gradual in H2. Delay in commissioning the Belcogen power plant has constrained development in power-consuming sectors, together with sugar processing where Q1 output was 12.6% decrease than a year earlier.
* Inflation quickened in H1 as a result of value rises of gasoline and food (the latter reflecting a pointy fall within the fish catch). Elevated import prices have ended the restoration of foreign reserves, so the forex peg to the US$ will hold monetary coverage tight, slowing the restoration of investment regardless of banks' return to health.
* The IMF, although not a price range contributor beyond its US$7m of emergency post-flood assist from February 2009, is placing strain on the government to tighten fiscal policy. Its late-July mission known as for more revenue raising, decrease non-capital public spending and pension reform to widen the primary surplus so that public debt falls. Public sector progress of 7.1 % was a major contributor to Q1 GDP enlargement, so withdrawal of fiscal stimulus will also dampen the growth outlook.
* Dangers of a clash with the new UK government have receded after certainly one of its key associates, Lord Ashcroft, revealed he is not chief government of essential investment vehicle BCB Holdings. But Tropical Storm Alex in late June underlined the return of attainable hostile weather events after a quieter 2009.
BACKGROUND
* Belize has the smallest population within the continental Americas, at simply 307,000. However it is twice the scale of Jamaica, and the population is young and rising quickly, above 2% pa, with a median age of below 20. Its persons are a mixture of Maya, British, African descendants, together with migrants from Mexico and Guatemala (the Mestizos). About 50% of the population is now Mestizos and 25% is Creole, a mix of African and white descendants. Consequently, Spanish is the rising language even though the official language is English and many of the inhabitants still speaks Creole. Known as British Honduras till 1973, Belize gained its independence inside the British Commonwealth late in 1981. There's an ongoing dispute with Guatemala, which still claims components of the territory.
* A peaceable democracy since 1954, Belize was largely dominated by the United Democratic Social gathering (UDP) earlier than Prime Minister Mentioned Musa's People's United Occasion (PUP) won successive elections in 1998 and 2003. Musa launched an ambitious programme of stimulating the economic system as well as deepening the social sector, but social unrest broke out after taxes were raised in 2005. The UDP returned to energy with a landslide election win in February 2008, promising to sort out corruption and increase the tourism and oil industries; leader Dean Barrow is the primary premier from the Creole community. Belize has financial ties with the Caribbean by way of the Caribbean Group (CARICOM) and Central America through the Sistema de Integraci?n Centroamericana (SICA).
* The country is Caribbean to its east, because of a big coast on the Caribbean Sea and on the Gulf of Honduras, and Central American to its west, with borders with Mexico to its northwest and Guatemala to its west and south. The land, a slim band along the sea, is made up of flat and dense forest plains in the north and of decrease mountainous components of the Maya region in the south. The coast is lined with the second longest coral barrier reef in the world, which along with 450 small islands is a significant asset for tourism. The tropical sizzling and humid climate has a rainy season between Could and November, and hurricanes and droughts are frequent.
* Regardless of little arable land, a generous climate allows agriculture to comprise over 15% of GDP and almost half of exports. Sugar remains to be the principle export, adopted by bananas and rising citrus output; fish, mainly shrimps, are additionally significant. Tourism, -thirds from the US, is rising on the energy of the long and richly endowed coast. The Corozal Export Processing Zone, launched in 1992 near the Mexican border, has attracted extra cross-border retailing than outsourced manufacturing. However textiles and clothing are boosting the commercial base, which is set for additional growth after discovery of petroleum deposits within the Cayo District and possible deposits in Toledo. Confirmed reserves are nonetheless restricted but likely to be boosted by offshore finds, and commercial exploitation started in April 2006. The US is the main commerce accomplice, accounting for a few third of exports and imports.
* With GDP per head (in PPP phrases) estimated by the IMF at US$7,719 in 2009,Belize's lifestyle is akin to an average Caribbean island such because the Dominican Republic or Grenada. Belize is the second most superior financial system in Central America, behind Costa Rica, and is extra developed than many of its Central and Southern American counterparts, notably neighboring Guatemala. In absolute terms though, Belize is the smallest continental economic system of the Americas, with GDP at simply US$1. 3bn in 2009 or US$2. 5bn in PPP terms.
* Financial exercise since 1999 has been boosted by public spending, which lifted GDP growth to a formidable average of 7.5% between 1999 and 2004, and 5.8% in 2006. Nonetheless, non-public sector growth throughout this period was held down by a fall in US tourism after 2001 and the impression of hurricanes Keith and Iris in October 2000 and 2001 respectively, which extensively damaged the agriculture, fishing and tourism industries.
Fiscal deficit-pushed progress resulted in a speedy widening of the current account deficit, which reached 21% of GDP in 2001 , as exports of goods and services fell and reconstruction sucked in imports. In parallel, exterior debt greater than doubled, from 50% of GDP in 1999 to one hundred ten% of GDP in 2003. Having run large deficits between 2000 and 2005, the federal government successfully defaulted on its debt in August 2006, dropping its investment grade credit ratings. Despite a restructuring of the US$960m debt concluded in February 2007, tight fiscal coverage geared toward lowering the budget deficit will lower the growth profile over the medium term. Agricultural and infrastructure injury from Hurricane Dean in 2007, adopted by the onset of worldwide recession, set back the economic recovery and the hassle to restore fiscal balance. Consequently, the federal government stays closely dependent on support and concessional loans.
Belize, Highlights and Key Issues
By: matteqygba
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