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Belize, formerly known as British Honduras, is the only English-speaking country in Central America. With a population of 400,900, this multilingual nation’s main exports are Sugar, bananas, citrus concentrate and solids, grain, beef, fish products, gold, molasses.
In addition, tourism is one of the country’s biggest foreign exchange earners with an increase in cruise ship arrivals over the las few years. The country is known for dense lush rainforests, Mayan ruins and the largest barrier reef in the Western Hemisphere.
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As a small, open economy, Belize is highly vulnerable to external shocks. The country remains relatively dependent on the agricultural sector, which accounted for 11.6% of GDP in 2019. The United States continues to be the largest single destination or Belizean exports with a market share of around 30% followed by the UK with a share of around 20%. Adverse weather conditions and other external shocks impact this economy significantly. The country remains vulnerable to bad local climate conditions, lower commodity and petroleum prices as well as a weaker US and UK economy.
Belize continues to be a highly indebted nation. In 2020, the debt to GDP ratio was 123.29 percent (30 percent increase) as compared to 94.42 percent the previous year. Belize’s third sovereign debt restructuring, in late 2016 and early 2017, occurred less than four years after its second debt restructuring, and within ten years of its first restructuring. The country restructured the same debt instrument three times in row. The third debt restructuring came in the wake of “serious economic and financial challenges currently facing the country”, more specifically, low economic growth, rising fiscal deficits, U.S. dollar strength, damage inflicted by Hurricane Earl, and higher-than-anticipated arbitration awards, among other factors.
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Economic outcomes in Belize over the past ten years have consistently been worse than anticipated. External shocks played a key role, but domestic factors, including declining oil production and utility nationalizations, were also important.
The pervasive impact of the COVID 19 pandemic significantly affected economic activity; however, the economy is expected to slowly recover as COVID 19 restrictions are lifted.