IMF mission reports good news for Belize’s economyAn International Monetary Fund team has concluded a visit to Belize. It has issued a good report that we note is in contrast to forecasts in the Economic and Financial Update of June 2012.The IMF statement points out that output rebound is expected despite a decline in oil production. The June report, however, states that declining oil revenue places a heavy strain on public finances and the economy in general. The IMF also expects Gross domestic product to grow optimistically between three point five percent and four percent in 2012 while the June report says that growth is expected to be two percent. Another difference we note was in inflation figures. The IMF puts inflation at one point five percent in January to August but the most recent report from the Statistical Institute of Belize shows that inflation is surging and increased to one point seven percent in August. According to the IMF, the current account deficit is expected to narrow to two point three percent of GDP, down from two point five percent in 2011, and this is despite the widening of the trade deficit. In summary, the statement points out that the government’s primary surplus target of two percent of GDP is within reach, but will require close monitoring of spending for the remainder of this fiscal year. This again is in contrast to the June report which states that the effects of the negative external climate and an increase in debt levels are set to combine with declining oil revenue to place a heavy strain on public finances and the economy in general. Generally, the IMF’s report is good news and as such multilateral funds are not expected to meet any shortfalls.
I have no idea HOW the business and economic newspaper of Belize can title the IMF report on the Belize Economy GOOD NEWS?
" This again is in contrast to the June report which states that the effects of the negative external climate and an increase in debt levels are set to combine with declining oil revenue to place a heavy strain on public finances and the economy in general. Generally, the IMF’s report is good news and as such multilateral funds are not expected to meet any shortfalls."
Mystery indeed? While the impact on government revenues are negative, the only GAIN I can see is in not paying anything to SUPERBOND HOLDERS? Which is a positive for enhancing existing smaller revenues in doing more infra structure work than would otherwise be possible.
From Love FM on subject of IMF results:
Friday, November 16 ------ IMF Concludes Yearly Review in Belize Nov 17, 2012
An International Monetary Fund (IMF) mission led by Gerardo Peraza wrapped up its yearly review of Belize’s economy in the context of the IMF’s Article four consultations on Thursday.
In a statement issued yesterday Peraza reported that Belize is experiencing an output rebound despite the decline in oil production. In 2012, real Gross Domestic Product growth is expected at three point five to four percent, led by a recovery from last year’s effects of weather-related damages in commodity exports as well as a recovery in tourism, and electricity generation. Inflation, which stood at one point five percent in January to August, has been easing as commodity prices pressures abate.
The current account deficit is expected to narrow to two point three percent of GDP down from two point five percent of GDP in 2011. This is attributed to higher inflows from tourism, lower repatriation of dividends by foreign companies operating in Belize, and higher remittances, despite a moderate widening of the trade deficit in goods. The report goes on to say preliminary fiscal data suggest that the government’s primary surplus target of two percent of GDP is within reach but will require a close monitoring of spending for the remainder of this fiscal year. In light of ongoing negotiations with bondholders on the restructuring of the “super-bond”, further discussions with the authorities are required to complete this year’s Article IV consultations.
Talks are expected to resume in the near future. Discussions so far have been focused on fiscal sustainability, external stability, and policies to enhance the financial sector resilience. In parallel with the Article IV consultations, a technical assistance mission assessed the current framework for debt management and helped the authorities build relevant institutional capacity. The IMF team was in Belize from November 1 to 15.