Belize: Country and Foreign Investment
Economy and Currency
The Belize Dollar (BZD) has a fixed rate of exchange of BZD2 to USD1. Most hotels, resorts, restaurants, and tour operators will accept US currency, traveler's checks, or credit cards. In Belize, be sure which dollar you are paying in!
After 1986 the Belizean economy improved dramatically, in part because of the adjustment program implemented by the government. Tourism became a major contributor to growth. Internal reform coincided with the recovery of the world economy, in particular the revival of the sugar market. Between 1986 and 1990, the Belizean economy grew at an average annual rate of more than 10%, inflation averaging only 2.8%. In the early 1990s, regional economic problems and the world-wide recession combined to undermine the economy. A tough austerity program in 1997 resulted in an economic slowdown that continued in 1998. The trade deficit grew, mostly as a result of low export prices for sugar and bananas. But the government's expansionary monetary and fiscal policies, initiated in September 1998, led to sturdy GDP growth averaging nearly 4% in 1999-2006. In August 2006, then Prime Minister Said Musa announced that the servicing of the country's debt, which accounted for 90% of its GDP, was "no longer a viable option" on existing terms. Consequently, the government rearranged its debt, and announced in February 2007 that it had successfully closed the exchange of its commercial external debt for new bonds due in 2029. The new bonds are denominated in US dollars, and provide for step-up coupons that have been set at 4.25% per annum for the first three years after issuance.
In his 2012 budget speech, Prime Minister and Minister of Finance, Dean Barrow, said that: "The US Dollar bond due 2029 is the single largest debt instrument within the recorded public debt stock, accounting for 46% of the overall recorded public debt and 99% of the external commercial category." He announced that an urgent review on the method of repayment of the 'super bonds' was underway. “We are keenly conscious of the effects of the great recession, a historic downturn from which Belize has not been insulated. The review of our obligations must therefore take into account the realities of the new regional and global economic landscape, as well as the likely impact of the contingent liabilities facing the country,” Mr. Barrow said.
A deal was struck to restructure the 'super bonds' in early 2013.
Sugar makes up nearly half of exports, while the banana industry is the country's largest employer. Growth slipped to 3.8% in 2008 as a result of the global slowdown, natural disasters, and the drop in the price of oil. In 2009, no growth was recorded.
Estimated GDP per capita in 2012 was USD8,900, compared to USD8,600 in 2011. Unemployment stood at 16.1% in September 2012 and 23.1% in 2011. It must be noted that different methodology was used for the compilation of the statistics which resulted in the difference of the figures. The Statistical Institute of Belize issued explanatory notes on its website in February, 2012.