Belize’s economy booms: Growth continues, unemployment plummets

By Horace Palacio: In a recent announcement, the Belize Cabinet, chaired by Prime Minister John Briceño, revealed positive findings from the International Monetary Fund’s (IMF) Article IV consultation. The consultation, concluded on February 22nd, offered an encouraging assessment of the nation’s economic health.

The IMF report highlights Belize’s strong economic performance, with real GDP growth exceeding expectations. The economy expanded by 17.9% in 2021, 8.7% in 2022, and maintained a robust 4.5% growth rate in 2023. This impressive trajectory is attributed to flourishing sectors such as tourism, construction, retail and wholesale trade, transport, and business process outsourcing.

The positive economic growth has significantly impacted Belize’s unemployment rate. From a high of 14% in 2020, the unemployment rate has steadily declined to a remarkable 3.4% in 2023. This is a clear indicator of a healthy and expanding labor market.

Alongside economic growth, Belize has also made significant strides in strengthening its fiscal position. The IMF report notes that public debt has decreased substantially, falling from 103% of GDP in 2020 to 66% in 2023. This fiscal improvement is a result of Belize’s strong nominal GDP growth.

Looking ahead, the IMF projects a moderation in real GDP growth, with an estimated 3.5% growth rate in 2024 and 2.5% from 2025 onwards. This reflects an expected return to pre-pandemic levels of tourist arrivals and the closing of the output gap. Unemployment is expected to remain low at 3.4% as the economy operates at full employment.

The IMF further projects a decline in inflation. After reaching 4.4% in 2023, primarily driven by lower transport and utility prices (but offset by a rise in food costs), inflation is predicted to decrease to 3.1% in 2024 and further to 1.3% over the medium term, aligning with the moderation of global commodity prices and inflation.

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