IMF discusses Economic Developments in Belize

In the end of December, the International Monetary Fund published an open letter addressed to the international financial community. In the letter, IMF Managing Director, Rodrigo De Rato discussed the progress towards economic reform made by the Belize government in the last couple of years.

Rodrigo De Rato said that, over the past 2 years, the authorities had made commendable strides in correcting serious macroeconomic imbalances that were based on their adjustment strategy. In accordance with IMF Managing Director’s explanation, tax measures and expenditure cuts have led to a notable improvement in the primary balance of government. A deficit of 3% of GDP in financial year 2003/04 (April to March) turned into a surplus of 3% of GDP in financial year 2005/06.

However, he does not consider these efforts to be sufficient to bring the economy back onto a sustainable path. Therefore, the authorities are undertaking further adjustment efforts during financial year 2006/07 and further.

In the letter, Rodrigo De Rato discussed also Belize’s debt exchange offer that has already been discussed previously.

All in all, the IMF has welcomed the progress, which Belize authorities have made – this regards addressing country’s serious macroeconomic imbalances in the context of a home-grown adjustment strategy. Nevertheless, the situation of Belize will be vulnerable for some time, which provides little space for slippage in implementing the policy framework.

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