IMF国际货币组织全球-Belize_2019-Article-IV-Consultation_62页_3mb

Belize 2019 Article IV Consultation Summary

Core Content

The International Monetary Fund (IMF) conducted the 2019 Article IV consultation with Belize, assessing the country's economic performance, risks, and policy priorities. The consultation concluded on November 27, 2019, and the documents released include a Press Release, Staff Report, and a Statement by the Executive Director. The report highlights Belize's ongoing economic recovery, but with a slowing pace, and outlines key challenges and reform areas for sustainable growth.

Main Economic Indicators

• GDP Growth:
  • 3.2% in 2018, with a projected 1.5% for 2019.
  • Expected to rebound to 2.5% in 2020 as the drought subsides.
  • Medium-term growth projected at just below 2%.
• Unemployment:
  • Reached a historic low of 7.6% in April 2019.
• Inflation:
  • Remained near zero in 2019, with fuel and transport prices declining.
• Current Account Deficit:
  • 7.9% of GDP in 2018, expected to remain large over the medium term.
• Public Debt:
  • Remained above 90% of GDP, with a target to reduce to below 60% over the long term.
• International Reserves:
  • Just below 3 months of imports of goods and services, below standard adequacy metrics.
• Fiscal Surplus:
  • Primary fiscal surplus reached 2.1% of GDP in FY2018/19.
  • Expected to narrow to 1.5% in FY2019/20 and remain below 2% in the following two years.

Main Views and Recommendations

Economic Outlook and Risks

• Economic Recovery:
  • Continued but slowing, with a contraction in 2019Q2 due to severe drought.
  • Tourism growth slowed from 15% in 2018 to 4% in 2019, partly due to grounding of 737 MAX aircraft and weak global expansion.
• Risks:
  • External risks include weaker U.S. growth, higher oil prices, and natural disasters.
  • Domestic risks include high crime rates, which threaten growth and macroeconomic stability.
  • The loss of Correspondent Banking Relationships (CBRs) could weaken the financial system.

Policy Priorities

• Fiscal Consolidation:
  • Continued efforts to narrow the primary fiscal surplus to 2% of GDP and reduce public debt.
  • The FY2019/20 budget targets a surplus of just above 2% of GDP.
  • The IMF encourages a rule-based fiscal framework based on a debt anchor to ensure long-term sustainability.
• Structural Reforms:
  • Accelerate reforms to improve the business climate, reduce crime, and promote inclusive growth.
  • Establish a credit bureau and collateral registry to improve access to credit.
  • Streamline procedures for starting a business and expand vocational training programs.
• Tax Reform:
  • Broaden the tax base and phase out exemptions and incentives.
  • Implement OECD transparency standards and strengthen tax treaties.
  • Address concerns regarding harmful preferential regimes.
• Financial Sector Oversight:
  • Strengthen bank supervision and resolution frameworks.
  • Conduct an asset quality review to assess capital buffers.
  • Intensify AML/CFT measures and ensure compliance with international standards.
• Natural Disaster Resilience:
  • Develop a Disaster Resilience Strategy based on a multi-year fiscal framework.
  • Invest in climate-resilient infrastructure and optimize risk management instruments.

Key Challenges

• High Public Debt:
  • Above 90% of GDP, with a need for long-term reduction.
• Current Account Deficit:
  • Large and persistent, despite higher tourism earnings.
• Slow Structural Reforms:
  • Limited progress in addressing supply-side bottlenecks and improving the business environment.
• Crime and Security:
  • High rates of violent crime, particularly among youth, pose risks to growth, competitiveness, and stability.
• CBR Vulnerabilities:
  • Reliance on a small number of CBRs exposes banks to counterparty risks.
  • The loss of CBRs has affected some banks, though most are not systemic.

Progress and Achievements

• Fiscal Adjustment:
  • Significant fiscal consolidation over the past two years.
  • Improved fiscal health, with government debt stabilizing.
• Tax Regime:
  • Adopted legislative changes to align with OECD standards.
  • Signed an agreement to strengthen tax treaties under the Multilateral BEPS Convention.
• IMF Support:
  • Provided technical assistance to improve AML/CFT frameworks and financial sector resilience.
• Political Context:
  • The UDP government maintains a strong parliamentary majority.
  • The next general election is due by November 2020.

Conclusion

The IMF acknowledges Belize's efforts in fiscal consolidation and financial sector reform but emphasizes the need for continued structural reforms to enhance growth and resilience. The country faces significant risks from external shocks and domestic challenges, including high public debt, crime, and CBR vulnerabilities. The report encourages the government to strengthen its policy framework, improve transparency, and enhance the business environment to support sustainable and inclusive growth.