subject: Belize, Highlights And Key Issues [print this page] * Growth resumed in This autumn 2009 and to 3.5% in S1 this yr, led by development of 9.3% in tourism, 9.eight% in mining and manufacturing, and 21% in crude oil. However recovery is at risk from slowdown in the EU and possibly the US (fundamental supply of a 5.eight% Q1 rise in guests), and the pace is likely to gradual in H2. Delay in commissioning the Belcogen power plant has constrained growth in energy-consuming sectors, together with sugar processing where Q1 output was 12.6% lower than a year earlier.
* Inflation quickened in H1 because of value rises of gas and food (the latter reflecting a pointy fall within the fish catch). Elevated import prices have ended the restoration of international reserves, so the currency peg to the US$ will maintain financial coverage tight, slowing the recovery of investment regardless of banks' return to health.
* The IMF, although not a price range contributor beyond its US$7m of emergency submit-flood help from February 2009, is placing stress on the government to tighten fiscal policy. Its late-July mission called for more income elevating, decrease non-capital public spending and pension reform to widen the primary surplus so that public debt falls. Public sector growth of 7.1 % was a significant contributor to Q1 GDP expansion, so withdrawal of fiscal stimulus will also dampen the expansion outlook.
* Risks of a conflict with the new UK authorities have receded after one of its key associates, Lord Ashcroft, revealed he is now not chief govt of main investment vehicle BCB Holdings. But Tropical Storm Alex in late June underlined the return of doable adverse weather events after a quieter 2009.
BACKGROUND
* Belize has the smallest population within the continental Americas, at simply 307,000. However it's twice the scale of Jamaica, and the population is younger 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 mixture of African and white descendants. As a result, Spanish is the rising language despite the fact that the official language is English and a lot of the inhabitants nonetheless speaks Creole. Often known as British Honduras until 1973, Belize gained its independence inside the British Commonwealth late in 1981. There may be an ongoing dispute with Guatemala, which still claims parts of the territory.
* A peaceful democracy since 1954, Belize was largely ruled by the United Democratic Get together (UDP) earlier than Prime Minister Mentioned Musa's People's United Celebration (PUP) won successive elections in 1998 and 2003. Musa launched an ambitious programme of stimulating the economy 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 develop the tourism and oil industries; leader Dean Barrow is the primary premier from the Creole community. Belize has economic ties with the Caribbean through the Caribbean Neighborhood (CARICOM) and Central America via the Sistema de Integraci?n Centroamericana (SICA).
* The nation is Caribbean to its east, thanks to 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 slender band along the sea, is made up of flat and dense forest plains within the north and of lower mountainous elements of the Maya region within the south. The coast is lined with the second longest coral barrier reef on this planet, which together with 450 small islands is a serious asset for tourism. The tropical hot and humid local weather has a rainy season between Might and November, and hurricanes and droughts are frequent.
* Despite little arable land, a generous climate allows agriculture to comprise over 15% of GDP and nearly half of exports. Sugar is still the primary export, followed by bananas and rising citrus output; fish, mainly shrimps, are additionally significant. Tourism, -thirds from the US, is rising on the power 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. But textiles and clothing are boosting the economic base, which is set for additional expansion after discovery of petroleum deposits in the Cayo District and doable deposits in Toledo. Confirmed reserves are nonetheless limited but more likely to be boosted by offshore finds, and commercial exploitation began in April 2006. The US is the primary trade associate, 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 way of life is similar to an average Caribbean island such as the Dominican Republic or Grenada. Belize is the second most advanced economy 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 although, Belize is the smallest continental financial system of the Americas, with GDP at simply US$1. 3bn in 2009 or US$2. 5bn in PPP terms.
* Financial activity 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, personal sector development during this period was held down by a fall in US tourism after 2001 and the impact of hurricanes Keith and Iris in October 2000 and 2001 respectively, which extensively broken the agriculture, fishing and tourism industries.
Fiscal deficit-driven development resulted in a rapid widening of the current account deficit, which reached 21% of GDP in 2001 , as exports of products and services fell and reconstruction sucked in imports. In parallel, exterior debt more than doubled, from 50% of GDP in 1999 to one hundred ten% of GDP in 2003. Having run massive deficits between 2000 and 2005, the government effectively defaulted on its debt in August 2006, losing its investment grade credit ratings. Despite a restructuring of the US$960m debt concluded in February 2007, tight fiscal policy aimed toward reducing the price range deficit will decrease the expansion profile over the medium term. Agricultural and infrastructure damage from Hurricane Dean in 2007, adopted by the onset of world recession, set back the economic restoration and the effort to restore fiscal balance. Consequently, the federal government stays heavily depending on help and concessional loans.
