Belize: Country and Foreign Investment
Economy and Currency
This page was last updated on 14 April 2021.
The Belize dollar (BZ$) has a fixed rate of exchange of BZ$2 to US$1. Most hotels, resorts, restaurants, and tour operators will accept US currency, traveller’s cheques and credit cards. In Belize, be sure you know which dollar you are paying in!
After 1986 the Belizean economy improved dramatically, in part as a result of the government’s adjustment programme. 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. From 1986 to 1990, the Belizean economy grew at an average annual rate of more than 10% and inflation averaged only 2.8%.
In the early 1990s, regional economic problems and the worldwide recession combined to undermine the economy. A tough austerity programme in 1997 led to an economic slowdown that continued through 1998. The trade deficit grew, mostly as a result of low export prices for sugar and bananas. But the government's expansive monetary and fiscal policies, initiated in September 1998, led to sturdy GDP growth averaging nearly 4% in 1999-2006.
In August 2006, 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 their issue.
In his 2012 budget speech, Prime Minister and Minister of Finance Dean Barrow said: "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.
Raw sugar is the top export, with fruit juice second; the banana industry is the country's largest employer. Growth has been hovering around nil frr the last year as the the country has encounted structural problems.
Estimated GDP per capita in 2016 was US$4,320, a slight fall from the level of US$4,467 in 2015. Unemployment stood at 8% at the end of 2016; this represents a dramatic fall from the high of 23.1% in 2011. It must be noted that different methodology was used for the compilation of the statistics which resulted in the difference in the figures. The Statistical Institute of Belize issued explanatory notes on its website in February 2012.