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- GDP (PPP):
- $3.0 billion
- 5.3% growth
- 2.7% 5-year compound annual growth
- $8,754 per capita
- Inflation (CPI):
- FDI Inflow:
Belize’s economic freedom score is 56.7, making its economy the 115th freest in the 2014 Index. Its overall score is 0.6 point worse than last year due to significant score reductions in trade freedom and labor freedom that offset a notable improvement in freedom from corruption. Belize is ranked 21st out of 29 countries in the South and Central America/Caribbean region.
Over the 20-year history of the Index, Belize’s economic freedom score has declined by 6.2 points, the 12th largest rating deterioration. The gains achieved in trade freedom and the area of government size that measures fiscal freedom and government spending have been outweighed by substantial declines in investment freedom, property rights, and freedom from corruption, all of which deteriorated by at least 30 points over the same period.
Registering its lowest score ever in the 2014 Index, Belize’s economic freedom status remains “mostly unfree.” Economic dynamism is constrained by institutional weaknesses that undermine prospects for long-term broad-based economic development. In particular, the judicial system remains inefficient and vulnerable to political interference. Corruption, perceived as widespread, severely undermines entrepreneurial dynamism.
Belize is a parliamentary democracy and member of the British Commonwealth. Prime Minister Dean Barrow of the ruling United Democratic Party won re-election for a five-year term in March 2012, more than a year earlier than constitutionally mandated. Since taking office in 2008, Barrow’s government has undermined foreign direct investment by expropriating Belize’s commercial “crown jewels,” the leading private telecommunications and electricity companies, owned by U.K. and Canadian investors, and the water company. He has also established close relations with the authoritarian Venezuelan government. Public-sector debt is above 70 percent of GDP and leaves little fiscal room for the government to maneuver, particularly as oil reserves continue to decline. Belize is plagued by high crime rates, the prevalence of HIV/AIDS, and rising unemployment.
Corruption is seen as widespread. Business owners complain that government officials, including police and others, often solicit bribes or show favoritism. The court system, although constitutionally independent, is often influenced by the executive. Expropriation of personal property is relatively rare, but the current government has expropriated major private foreign-owned electricity and telecommunications companies.
The top individual income and corporate tax rates are 25 percent. Other taxes include a goods and services tax and a stamp duty. The overall tax burden amounts to 23.3 percent of gross domestic income. Government spending has fallen slightly to 29.3 percent of the total economy. Public debt is around 80 percent of GDP.
The inefficient business environment continues to impede broader economic development. Launching a business still costs about half the level of average annual income, although there is no minimum capital requirement. In the absence of a well-functioning labor market, informal labor activity persists in many sectors. The government maintains price controls on various products such as rice, sugar, and flour and subsidizes the cost of electricity.
Belize has an 11.1 percent average tariff rate, and tariffs are a significant source of government revenue. Expropriation of private property is a deterrent to new investment. The revised Domestic Banking and Financial Institutions Act came into force in January 2013, significantly expanding the role of the central bank. Credit allocation is influenced by the government.