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- GDP (PPP):
- $2.9 billion
- 3.4% growth
- 2.7% 5-year compound annual growth
- $8,248 per capita
- Inflation (CPI):
- FDI Inflow:
Economic freedom has stagnated in Belize over the past few years. The government’s record on structural reform is uneven, and lingering policy weaknesses in many parts of the economy constrain more dynamic growth. Despite some streamlining of the process for setting up a business and completing regulatory requirements, such challenges as poor enforcement of the commercial code and lack of transparency often deter entrepreneurial activity.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 57.4 (up 0.6 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 118th
- Regional Ranking: 20th in the South and Central America/Caribbean Region
- Notable Successes: Trade Freedom and Monetary Freedom
- Concerns: Property Rights, Corruption, and Investment Freedom
- Overall Score Change Since 2012: –4.5
Belize has benefited from a comparatively high degree of trade freedom, but dynamic economic gains are undercut by the lack of progress in reforming financial services and investment, both of which are critical to sustaining open markets. The judicial system remains vulnerable to political interference, and corruption is common.
Belize is a parliamentary democracy. Prime Minister Dean Barrow of the United Democratic Party is serving his second consecutive five-year term until 2017, and his popularity could lead him to try for a third term. The economy relies primarily on tourism, followed by exports of marine products, citrus, sugar, and bananas. Economic growth increased in 2014, buoyed by subsidies from Venezuela. High unemployment and a heavy foreign debt burden remain major concerns. According to IMF estimates, claims for compensation arising from the government’s nationalization of Belize Telemedia in August 2009 and Belize Electricity in June 2011 could increase the debt stock by 17 percent of annual GDP.
Belize is the only Central American country that is not a party to the U.N. Convention Against Corruption. Since 2009, Transparency International has not had enough access to data to include Belize in its annual Corruption Perceptions Index. The judiciary, although independent, is often influenced by the executive. In 2015, the government agreed to compensate the private owner of a major electricity company that it expropriated in 2011.
The top income and corporate tax rates are 25 percent; petroleum profits are taxed at 40 percent. Other taxes include a goods and services tax and a stamp duty. The overall tax burden equals 23.2 percent of total domestic income. Government spending amounts to 30.6 percent of GDP. Public debt has fallen below 80 percent of GDP due to reductions in budget deficits, but falling oil revenues threaten the fiscal outlook.
Launching a business still costs about half the level of average annual income, but there is no minimum capital requirement. Getting all the necessary permits takes more than 70 days. Despite flexible employment regulations, the formal labor market is not 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 relatively high 10 percent average tariff rate. Import licenses are required for several categories of consumer and agricultural goods. The government screens foreign investment in domestic companies. The state influences credit allocation through quasi-government banks. The small financial sector has been largely immune to the global financial turmoil.