The IMF has just completed their assessment of the Belizean economy. Their conclusions could be described as cautiously optimistic.
Some notable observations from the report:
1. Petroleum extraction contributed 5% of GDP in 2008. This may not sound like much, but when considers that this sector of the economy did not exist a couple of years ago, it is vital that the government makes prudent decisions about where the new income goes.
2. The IMF lauded the Belizean economy as being an “open economy” and they commended the authorities commitment to sound macroeconomic policies.
3. The IMF warns that although Belize has largely been spared from the global economic downturn they should expect that 2009 will be slower year as remittances form states, foreign direct investment, and tourism dollars will decrease.
4. The IMF says that Belize should consider freezing all government wage increases. But they advise that the government should continue investing in infrastructure that will have future payoffs. This might be highly unpopular with civil servants particularly teachers. Hopefully petty politics will not interfere with educating the Belizean populace as to the true economic conditions facing the country.
5. Belizean citizens need to embrace austerity. The IMF says that commercial and personal loans represented 70% of the country’s entire gross domestic product. Furthermore, non performing loans (NPLs), the number of loans that people are not paying back more than doubled in 2008. This is a bad sign, this means that our banking system handed out loans like candy and now people are failing to pay them back.
The IMF’s report is a must read for any Belizean who wants to be informed.