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- GDP (PPP):
- $3.0 billion
- 1.6% growth
- 2.2% 5-year compound annual growth
- $8,716 per capita
- Inflation (CPI):
- FDI Inflow:
Belize’s economic freedom score is 56.8, making its economy the 117th freest in the 2015 Index. Its overall score is about the same as last year, with improvements in investment freedom and the control of government spending counterbalanced by declines in business and labor freedoms. Belize is ranked 20th out of 29 countries in the South and Central America/Caribbean region.
Over the past five years, Belize’s economic freedom has declined by 7 points. Deterioration has occurred in half of the 10 economic freedoms since 2011, with double-digit declines in freedom from corruption, business freedom, and labor freedom. Given the patchy efforts to advance economic reforms, economic dynamism in Belize remains constrained by structural weaknesses that undermine prospects for broad-based economic development.
Corruption has become prevalent, with Belize’s score on freedom from corruption declining by more than 20 points over the past half-decade. A weak and politically vulnerable judiciary has been ineffective in upholding the rule of law, and the country has become a haven for money laundering and drug transit. Despite a comparatively high level of trade freedom, dynamic gains from trade have been undercut by the lack of progress in reforming the investment climate and the financial sector.
Belize is a parliamentary democracy. Prime Minister Dean Barrow of the United Democratic Party won re-election for a five-year term in March 2012, more than a year earlier than constitutionally mandated. Since taking office in 2008, Barrow’s government has undermined investment by expropriating the leading private telecommunications and electricity companies and the water company. However, Belize has reached an agreement with bondholders to restructure its $544 million external debt, also referred to as the “superbond.” The economy is based primarily on tourism followed by exports of marine products, citrus, sugar, and bananas. Oil reserves are declining. Belize has high crime rates, a prevalence of HIV/AIDS, and significant unemployment.
A government commission to monitor, prevent, and combat corruption has not met for several years. Business owners complain that government officials, police, and others often solicit bribes or show favoritism. The judiciary, although independent, is influenced by the executive. As of May 2014, the government had not compensated the owners of expropriated foreign-owned electricity and telecommunications companies.
The top individual income and corporate tax rates are 25 percent. Other taxes include a goods and services tax and a stamp duty. The overall tax burden is equal to 22.5 percent of the domestic economy. Government expenditures are equivalent to 26.9 percent of gross domestic product, and public debt amounts to 76 percent of the size of the domestic economy.
The process for setting up a business and completing regulatory requirements has been streamlined, but entrepreneurial activity often faces such challenges as poor enforcement of the commercial code and lack of regulatory transparency. A formal labor market has not been fully developed. The government maintains price controls on various products such as rice, sugar, and flour and subsidizes the cost of electricity.
Belize has a 9.8 percent average tariff rate. The government relies heavily on tariff revenue, and import licensing affects some agricultural imports. Both foreign and domestic investors may find it difficult to title land. Despite efforts to improve efficiency, the government-controlled financial sector does not meet private-sector credit needs sufficiently. The banking sector remains burdened with nonperforming loans.