BELIZE ECONOMIC OUTLOOK MID YEAR 2010

WHERE DOES BELIZE STAND ECONOMICALLY?

The Belize Economy seems to be neutral. We are still spending more than we earn. Subjectively ( we lack statistics ) the economy is doing well and could be considered normal. Inflation runs around 12%.
In Belize dropping interest rates on bank CD's for the small people are causing capital to flee. The few large depositors in bank CD's are still getting gargantuan interest rates though. ( 9.5% ). Average CD rate is 8.75%, going mostly to big players. The effect is disproportionate. The masses of smaller holders of bank CD's are being exploited with rates around 6.5%. It is not a fair and level playing field. The Belize currency is not floating and inter-changeable with any other currency. The fixed rate inside the country is $2 to $1 usa. This has created internal stability at the cost of reluctance to invest, due to inability to easily do business inside and outside the country. If you bring foreign money in to invest, you end up stuck with Belize currency you cannot change again to outside foreign currency. Inside the country, the Central Bank continues to hold tight on foreign exchange incoming, mostly from some commodity exports and tourism. Ashcroft no longer has the ability to siphon off foreign exchange with his BTL dividends. This makes a difference. The GOB gets that foreign exchange earned by BTL now. Small business people cannot get foreign exchange except on the black market at a premium. Foreign investment lacking the ability to freely change their money back and forth between other currencies continue to be reluctant to invest in Belize for local projects. Only foreign exchange earning businesses done by foreign investment can succeed. This picture continues to stagnate the economy. Growth this year is expected to be slightly negative. Life otherwise is normal. Government continues to be the biggest employer in a SOCIALIST economy.


Venezuela on the other hand has a GNP which fell 5.8%, the inflation has stalled at around 30%, private investment fell 30%, and capital continues to flee the country.

Zimbabwe has a recovering economy. Growth is 6% and inflation under 5%. for comparison.