Barrow comments IMF outlook of Belize

The International Monetary Fund (IMF), in light of Belize’s poor economic outlook, offered Belize several recommendations in its latest report on the jurisdiction; however Prime Minister Dean Barrow has openly rejected most of their recommendations.

Responding to the IMF’s recommendations after its routine Article IV Consultation, Barrow emphasized that Belize would not be implementing the recommendations despite the IMF saying that the country’s medium term economic outlook was “weak”.

“There is absolutely no obligation on our part to follow any of it and certainly with respect to the recommendations as to raising the GST and as to doing away with exemptions and the recommendations having to do with pensions and public officers. We absolutely reject those. As we have made clear repeatedly,” Barrow told the media.

He added that Belize’s economic difficulties were only temporary problems.

The IMF recommended, among other things that GOB increase General Sales Tax (GST) from 12.5 to 15%, and that it increase revenue inflows from GST by removing the list of zero-rated goods. The fund estimates that each of the reforms could yield up to 1% of GDP. The IMF also recommended civil service reforms to address the amount paid out in pensions and the number of public servants, in an attempt to contain the country’s wage bill, which is the largest in the region. The IMF’s assessment said that Belize had high public debt, decreasing economic performance, and a lack of strict fiscal consolidation policies, low growth projections, and increased unemployment, which were major factors in the poor economic outlook. Also, the International Monetary Fund pointed to over USD 100 million in outstanding arbitration awards; and the withdrawal of corresponding banking relationships as issues that further brought the outlook down.

Comments are closed.