- GDP (PPP):
- $3.4 billion
- 0.3% growth
- 1.4% 5-year compound annual growth
- $7,295 per capita
- Inflation (CPI):
- FDI Inflow:
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.
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.
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.
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.
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.
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.