IMF: Belize economy expected to return to positive growth this year
Friday, June 16 2017 @ 11:10 AM AST
Contributed by: AleemKhan
The economy is expected to return to positive growth in 2017. Output is estimated to have contracted by 0.8 percent in 2016, reflecting a continued slowdown in oil production and setbacks in agriculture, including destruction of crops by Hurricane Earl. The current account deficit decreased slightly to an estimated 9.4 percent of GDP in 2016, while unemployment increased to 11.1 percent in September 2016, from 10.2 percent a year earlier. The external deficit reduced December 2016 gross reserves to US$377 million, or about 4 months of import coverage. Financial sector reforms continue to bear fruit, with the consolidated banking sector’s gross NPL ratio declining to 9.8 percent (2.2 percent net of provisions) in March 2017, due to legacy loan write offs and restructuring, while the reported capital adequacy ratio is stable, at 23 percent. Private sector credit declined by 3 percent y/y in December 2016, despite ample liquidity in the banking system. For 2017, growth of 2˝ percent is projected, reflecting a rebound in the primary sector combined with continued strong growth in tourism, supported by improved airlift (additional and less expensive flights), better marketing, and new FDI-financed projects. The current account deficit is expected to narrow to 8 percent of GDP in 2017. Inflation is projected to increase slightly to just over 2 percent in 2017, in line with price developments in major trading partners.