2020 Index of Economic Freedom

Belize

OVERALL SCORE57.4
WORLD RANK111
Rule of Law

Property Rights44.4

Judicial Effectiveness46.4

Government Integrity33.5

Government Size

Tax Burden79.5

Government Spending66.3

Fiscal Health53.9

Regulatory Efficiency

Business Freedom60.9

Labor Freedom54.3

Monetary Freedom80.4

Open Markets

Trade Freedom64.2

Investment Freedom55.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.4 million
  • GDP (PPP):
    • $3.4 billion
    • 3.0% growth
    • 2.2% 5-year compound annual growth
    • $8,501 per capita
  • Unemployment:
    • 9.4%
  • Inflation (CPI):
    • 0.3%
  • FDI Inflow:
    • $119.5 million

Belize’s economic freedom score is 57.4, making its economy the 111th freest in the 2020 Index. Its overall score has increased by 2.0 points, led by a big increase in the score for fiscal health. Belize is ranked 22nd among 32 countries in the Americas region, and its overall score is below the regional and world averages.

The Belizean economy has languished in the mostly unfree category for the past seven years after having enjoyed moderate freedom for more than a decade. Moderate GDP growth during those seven years has been due mostly to growing tourism receipts and rising volumes of goods and other services exports.

To sustain progress toward greater economic freedom, the government will need to continue efforts to rein in public debt and narrow the fiscal deficit. Addressing chronic problems related to corruption and the weak rule of law, however, must be its first priority.

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Background

The former colony of British Honduras gained independence in 1981 as a parliamentary democracy. Facing elections in 2020, Prime Minister Dean Barrow’s United Democratic Party has been weakened by social unrest and an upsurge in violent crime. 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 transactions in Belize. Foreign reserves remain under pressure as the government continues to make U.S. dollar payments to settle a dispute arising from the 2009 nationalization of Belize Telemedia.

Rule of LawView Methodology

Property Rights 44.4 Create a Graph using this measurement

Judicial Effectiveness 46.4 Create a Graph using this measurement

Government Integrity 33.5 Create a Graph using this measurement

Individuals have the right to own property and establish private businesses, but legal regulations can be poorly enforced. The judiciary, though lacking in resources, is generally independent. Several measures are being implemented to reduce backlogs, time delays, and costs. Belize’s geographical location, porous borders, poverty, and limited material and personnel resources leave it vulnerable to illicit trafficking, illegal migration, transnational criminal organizations, and corruption.

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 28.2 percent of total domestic income. Government spending has amounted to 33.5 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 4.2 percent of GDP. Public debt is equivalent to 94.8 percent of GDP.

Regulatory EfficiencyView Methodology

The World Bank’s 2019 Doing Business report ranked Belize very low on access to credit and ease of starting a business. In general, employers are free to adjust their workforces in response to changes in the business environment. Two-thirds of new entrants to the labor force are female. The government continues to maintain price controls on such basic foods as rice, sugar, bread, and flour, as well as on butane gas and all utilities.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 111.8 percent of GDP. The average applied tariff rate is 10.4 percent, and two nontariff measures are in force. Dynamic growth in investment is constrained by lingering policy and institutional weaknesses, although there are no restrictions on foreign ownership. The financial system is small. There is no stock market, and capital market operations are rudimentary.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Canada78.20.5
2Chile76.81.4
3United States76.6-0.2
4Colombia69.21.9
5Uruguay 69.10.5
6Jamaica 68.5-0.1
7Saint Lucia68.2-0.5
8Peru67.90.1
9Panama 67.20.0
10Saint Vincent and the Grenadines66.81.0
11Mexico661.3
12Costa Rica 65.80.5
13The Bahamas64.51.6
14Guatemala 641.4
15Paraguay 631.2
16El Salvador 61.6-0.2
17Barbados61.4-3.3
18Honduras 61.10.9
19Dominican Republic60.9-0.1
20Dominica60.8-2.8
21Trinidad and Tobago58.31.3
22Belize57.42.0
23Nicaragua 57.2-0.5
24Guyana56.2-0.6
25Brazil53.71.8
26Argentina53.10.9
27Haiti52.3-0.4
28Ecuador51.34.4
29Suriname49.51.4
30Bolivia42.80.5
31Cuba26.9-0.9
32Venezuela 25.2-0.7
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