2021 Index of Economic Freedom

Belize

OVERALL SCORE57.5
WORLD RANK114
Rule of Law

Property Rights41.8

Judicial Effectiveness45.7

Government Integrity36.3

Government Size

Tax Burden78.7

Government Spending64.7

Fiscal Health68.5

Regulatory Efficiency

Business Freedom60.0

Labor Freedom54.2

Monetary Freedom80.2

Open Markets

Trade Freedom55.0

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.4 million
  • GDP (PPP):
    • $3.4 billion
    • 0.3% growth
    • 1.4% 5-year compound annual growth
    • $7,295 per capita
  • Unemployment:
    • 6.4%
  • Inflation (CPI):
    • 0.6%
  • FDI Inflow:
    • $102.9 million

Belize’s economic freedom score is 57.5, making its economy the 114th freest in the 2021 Index. Its overall score has increased by 0.1 point, primarily because of an improvement in fiscal health. Belize is ranked 21st among 32 countries in the Americas region, and its overall score is below the regional and world averages.

The Belizean economy remains stuck in the mostly unfree category for the ninth year in a row after having enjoyed more than a decade in the ranks of the moderately free. The biggest obstacles to greater economic freedom in Belize stem from chronic problems related to corruption and the weak rule of law.

IMPACT OF COVID-19: As of December 1, 2020, 148 deaths had been attributed to the pandemic in Belize, and the economy was forecast to contract by 16.0 percent for the year.

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Background

The former colony of British Honduras gained independence in 1981. The economy relies primarily on tourism and exports of marine products, citrus, sugar, and bananas. Fluctuating agricultural commodity prices complicate policymaking. Elected in 2008, Prime Minister Dean Barrow of the conservative United Democratic Party finished his third and last consecutive four-year term in 2020. In November elections, the opposition People’s United Party won a parliamentary majority, and party leader Johnny Briceño was sworn in as prime minister on November 12. Against the backdrop of declining tourism receipts, the Central Bank of Belize has begun to offer its first U.S. dollar–denominated Treasury notes to raise capital for its foreign reserves. Violent crime remains a problem.

Rule of LawView Methodology

Property Rights 41.8 Create a Graph using this measurement

Judicial Effectiveness 45.7 Create a Graph using this measurement

Government Integrity 36.3 Create a Graph using this measurement

The law protects property rights and interests, but enforcement can be uneven. The judiciary lacks resources but is generally independent. Because of its geographical location, porous borders, poverty, and limited material and personnel resources, Belize is vulnerable to illicit trafficking, illegal migration, transnational criminal organizations, and corruption. Transparency International does not include Belize in its annual Corruption Perceptions Index.

Government SizeView Methodology

The top income and corporate tax rates are 25 percent; petroleum profits are taxed at a rate of 40 percent. Other taxes include a goods and services tax and a stamp duty. The overall tax burden equals 29.7 percent of total domestic income. Government spending has amounted to 34.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.8 percent of GDP. Public debt is equivalent to 96.7 percent of GDP.

Regulatory EfficiencyView Methodology

Belize has lost a little ground in business freedom compared to other countries, although electricity can now be obtained more quickly. Unemployment was already rising before the advent of the COVID-19 pandemic. The government maintains price controls on basic foods (such as rice, sugar, bread, and flour) as well as butane gas and all utilities.

Open MarketsView Methodology

Belize has two preferential trade agreements in force. The trade-weighted average tariff rate is 17.5 percent, and two nontariff measures are in effect. Bureaucratic barriers may discourage foreign investment. The state influences credit allocation through quasi-government banks. The financial sector is small, and capital markets are not fully developed. In 2020, the central bank reduced the statutory cash reserve requirement to facilitate credit flows.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Canada77.9-0.3
2Chile75.2-1.6
3United States74.8-1.8
4Uruguay69.30.2
5Jamaica690.5
6Colombia68.1-1.1
7Peru67.7-0.2
8Saint Lucia67.5-0.7
9Saint Vincent and the Grenadines66.3-0.5
10Panama66.2-1.0
11Mexico65.5-0.5
12Barbados653.6
13The Bahamas64.60.1
14Costa Rica64.2-1.6
15Guatemala640.0
16Paraguay62.6-0.4
17Dominican Republic62.11.2
18El Salvador61-0.6
19Honduras59.8-1.3
20Trinidad and Tobago590.7
21Belize57.50.1
22Guyana57.41.2
23Nicaragua56.3-0.9
24Brazil53.4-0.3
25Dominica53-7.8
26Argentina52.7-0.4
27Ecuador52.41.1
28Haiti50.8-1.5
29Suriname46.4-3.1
30Bolivia42.7-0.1
31Cuba28.11.2
32Venezuela24.7-0.5
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