Belize has the smallest economy in Central America, with a gross domestic product (GDP) of US $2.57 billion in 2022, a 12.1 percent expansion over the previous year. Belize’s government encourages FDI as a tool for economic growth.
The government continued to advance its debt management program. Public debt declined to 64.1 percent of GDP in 2022 from 108 percent in 2021. This greater fiscal space supports implementing the government’s economic growth agenda and social programs.
In 2022, tourism and agriculture continued to rebound from the massive economic contraction that was driven by COVID. The Central Bank of Belize (CBB) recorded total inflows of FDI at US $207.25 million (a 38.4 percent annual increase) in 2022 concentrated primarily in real estate, construction, hotels, and restaurants. The Millennium Challenge Corporation (MCC) is developing a five-year compact with Belize that will focus on providing development assistance funding for education and to lower the cost of electricity.
In 2022, the government launched a National Investment Policy and Strategy (NIPS) as well as the Micro, Small, Medium Enterprise (MSME) Strategy to improve the framework for domestic and foreign investment. The government also passed a credit reporting act and are working on the establishment of a credit bureau and collateral registry to increase the availability of financing for MSMEs. As part of the government’s e-governance agenda, several digitalization projects are underway, including the land and business registries, and the digitalization of firms and government services.
Generally, Belize has no restrictions on foreign ownership and control of companies; however, foreign investments must be registered with the CBB and adhere to the Exchange Control Act and related regulations. The Companies Act was overhauled in 2022 to require all companies, local and overseas, to re-register with Belize Companies and Corporate Affairs Registry. Under the new act, companies with foreign interests (including shareholders) must be registered through an agent. Additionally, overseas companies were converted to “foreign companies,” with other provisions pertaining only to foreign companies, such as a requirement to maintain a registered office and having a registered agent, as well as certain documents and records in Belize.
While the banking system remains fragile, there are efforts to maintain stability and initiate reforms. This assessment is corroborated by the IMF’s Concluding Statement in February 2023. Nonperforming loans increased to 7 percent of gross loans in 2022, higher than the 2021’s 5 percent and the regulatory ceiling. Efforts were also underway to secure new correspondent banking relationships. The government is also taking steps to improve its anti-money laundering/combatting the financing of terrorism (AML/CFT) framework as it prepares for the Mutual Evaluation by the Caribbean Financial Action Task Force in November 2023.
Throughout much of 2022, key transparency and oversight bodies including the Integrity Commission, the Ombudsman’s Office, the Auditor General’s Office, and the Labor Commissioner remained vacant. In practice, these offices are understaffed and under resourced to effectively undertake their respective mandates. In 2022, Belize fell from the third highest murder rate in the region to the sixth. Freedom House finds that citizen security is still a concern with the high level of crime countrywide.
Global inflationary trends have severely affected Belize. After two decades of relative price stability, inflation ballooned from 0.1 percent in 2020 to 6.3 percent in 2022. Higher prices on imported goods such as food, fuel, inputs into the productive sector like fertilizer, as well as supply chains costs primarily due to Russia’s invasion of Ukraine could continue to exacerbate inflation, widen the current account deficit, and reduce international reserve buffers.
|TI Corruption Perceptions Index||2022||N/A||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2022||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2021||USD 64 million||https://apps.bea.gov/international/factsheet|
|World Bank GNI per capita||2021||USD 6,070||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|