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- GDP (PPP):
- $3.1 billion
- 1.5% growth
- 2.1% 5-year compound annual growth
- $8,220 per capita
- Inflation (CPI):
- FDI Inflow:
Belize’s economic freedom score is 57.1, making its economy the 116th freest in the 2018 Index. Its overall score has decreased by 1.5 points, with declines in the scores for fiscal health, labor freedom, government spending, trade freedom, and property rights overwhelming an improvement in judicial effectiveness. Belize is ranked 23rd among 32 countries in the Americas region, and its overall score is below the regional and world averages.
Economic reform in Belize has been uneven, and more dynamic growth is constrained by lingering policy and institutional weaknesses in many parts of the economy. Entrepreneurial activity remains limited, and recovery from the recent economic slowdown has been narrowly based. Burdensome tariff and nontariff barriers and the high cost of domestic financing hinder private-sector development and economic diversification. The inefficient regulatory infrastructure raises the cost of entrepreneurial activity. The judicial system remains vulnerable to political interference, and corruption is common.
The former colony of British Honduras gained independence in 1981 and is a parliamentary democracy. Prime Minister Dean Barrow of the United Democratic Party was elected to his third and final consecutive five-year term in 2015. The economy relies primarily on tourism and exports of marine products, citrus, sugar, and bananas. Belize’s vulnerability to fluctuating agricultural commodity prices complicates policymaking. Actions to tighten controls against money-laundering and the financing of terrorism have heightened scrutiny of international financial intermediation in Belize. Foreign reserves could be under pressure in 2018 as the government draws on U.S. dollars to make payments to shareholders of Belize Telemedia as part of the settlement of a dispute arising from the firm’s 2009 nationalization.
Unreliable land title certificates have led to numerous property disputes involving foreign investors and landowners. The nominally independent judiciary is often influenced by the executive. In 2016, Belize finally bowed to pressure from public, private-sector, and civil society groups and acceded to the U.N. Convention Against Corruption. Transparency International is unable to access enough data to include Belize in its annual Corruption Perceptions Index.
The top income and corporate tax rates are 25 percent; petroleum profits are taxed 40 percent. Other taxes include a goods and services tax and a stamp duty. The overall tax burden equals 27.3 percent of total domestic income. Over the past three years, government spending has amounted to 33.9 percent of total output (GDP), and budget deficits have averaged 4.4 percent of GDP. Public debt is equivalent to 98.6 percent of GDP.
Bureaucratic delays can make it difficult to do business in Belize. In general, employers are free to adjust their workforce in response to fluctuating market conditions. Due to a recent influx into the labor market, the unemployment and underemployment rates have risen by 1 percent and 3 percent, respectively. The government subsidizes electricity and maintains price controls on various products such as rice, sugar, and flour.
Trade is extremely important to Belize’s economy; the combined value of exports and imports equals 125 percent of GDP. The average applied tariff rate is 10.0 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The revised Domestic Banking and Financial Institutions Act has significantly expanded the role of the central bank. Credit allocation is influenced by the government.