Belize WT/TPR/S/238 
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I. ECONOMIC ENVIRONMENT 
(1) INTRODUCTION  
1. Belize is a relatively small country in Centra l America which borders Mexico to the north, 
Guatemala to the west and south, and the Caribbean Sea to the east.  The total area of Belize is 22,963 
square kilometres.  With a population in 2009 of 333,200 it had a population density of 14.5 per 
square kilometre, one of the lowest in Central America and the Caribbean.  Population growth is 
strong, at over 3% per year between 2003-10, an d 48% of the population were under 20 in 2009.1  
Urbanization has been increasing for a number of years and just over half of the population live in urban areas.
2 
2. From 2002 to 2006, economic growth was strong,  averaging over 5%;  growth was based on 
high levels of government spending, which led to an unsustainable rise in the public debt.  Growth fell 
sharply in 2007, as government spending was cut back and the external commercial debt was substantially restructured.  The economy picked up in  the first half of 2008 be fore the global financial 
crises led to reduced foreign investment in Beliz e, lower growth in foreign remittances, and lower 
domestic consumption.  At the same time, grant infl ows were down sharply on the previous year.  The 
result was a slight decline in real GDP in 2009.  Re newed growth of about 2% is expected for 2010.   
3. As Belize has a small, relatively open economy,  trade is an important component of its GDP, 
with the ratio of imports plus exports of goods an d services at well over 100% of GDP (Table I.1).  A 
large portion of exports are made up of agriculture  and agri-processed goods, with exports of crude oil 
having increased in importance since production starte d in 2006.  The main export markets are the 
United States and the European Union under prefer ential tariff arrangements.  The authorities noted 
that manufactured goods make up a large portion of imports and exports, but these are mainly 
imported for sale to Mexican visitors to the free zone on the border with Mexico. 
Table I.1 
Basic economic indicators, 2003-09 
(BZS$ million, US$, and%) 
 2003 2004 2005 2006 2007 2008 2009 
I. GDP        
Current GDP (BZ$ million) 1,976.4 2, 112.6 2,229.7 2, 426.2 2,553.5 2, 717.4 2,707.0 
Current GDP (US$ million) 988.4 1,056. 3 1,114.8 1,213.1 1, 276.8 1,358. 7 1,353.5 
Per capita GDP (US$) 3,646 3,758 3,846 4,046 4,137 4,218 4,062 
GDP at 2000 constant prices (BZ$ million) 2,006.8 2,099.0 2, 163.1 2,263.8 2,294. 1 2,377.7 2,377.6 
Real GDP, growth rate (%) 9.8 4.6 3.0 4.7 1.2 3.6 0.0 
GDP by expenditure (BZ$ million)        
Private consumption 1,530.5 1,586.0 1,601.8 1,600.0 1,704.8 1,758.8 .. 
Public consumption 289.6 295.3 322.0 345.2 390.7 430.4 .. 
Gross fixed capital formation 374.8 373.2 412.6 450.7 492.5 691.8 .. 
Changes in inventories (i ncluding discrepancy) 31. 1 40.4 58.4 8.5 9.4 48.2 .. 
Exports of goods and services 1,055.5 1,087.4 1,254.0 1,580.0 1,647.3 1,733.1 1,453.6 
Imports of goods and services 1,326.7 1,255.6 1,430.0 1,528.2 1,620.3 1,915.7 1,564.5 
Statistical discrepancy 3. 0 -14.3 13.9 34.5 2.2 4.6 .. 
Table I.1 (cont'd) 
                                                      
1 SIB (2010). 
2 UN ESA (2009). WT/TPR/S/238 Trade Policy Review 
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 2003 2004 2005 2006 2007 2008 2009 
II. Memo items        
Population (million) 0.271 0. 281 0.290 0.300 0. 310 0.322 0.333 
Gross international reserves by the Central Bank (US$ 
million) 84.6 53.3 35.8 85.6 108.5 166.4 213.7 
Disbursed outstanding extern al debt (US$ million) 805.9 893.1 970.5 985.7 972.7 957.8 1,015.6 
 (% of GDP) 81.6 84.5 87.1 81.3 75.9 70.4 75.0 
External debt service payments (US$ million) 82.8 96.8 88.9 134.3 133.4 96.9 79.9 
Disbursed outstanding domes tic debt (US$ million) 128.2 139.2 139.7 149.9 160.9 166.4 158.5 
 
.. Not available  
Source : Central Bank of Belize, Annual Report (various issues) .  Viewed at:  http://www.centralbank.org.bz/services3. 
asp?service=Annual+Report+ [June 2010]. 
(2) RECENT ECONOMIC DEVELOPMENTS  
(i) Structure of the economy 
4. Belize is a lower middle income country with  a GDP per capita of US$4,062 in 2009.  In 
recent years, GDP growth has varied considerably fr om one year to another, from a high of 9.3% in 
2003 to a slight decline in 2009, with a return to low, but positive, growth expected for 2010.  In 2009, 41% of the population had incomes below the poverty line, defined as an income of US$1,750 
per year.   
5. The services sector is the biggest sector in Beli ze contributing 53.7% to GDP (Table I.2):  
wholesale and retail trade, and transport and communi cations together represent nearly one quarter of 
economic activity.  However, since 2006, the servi ces sector has been declinin g in relative importance 
compared with secondary activities.  The growth in se condary activities is due to the start of crude oil 
production, which is included under manufacturing by the Statistical Institute of Belize (Box I.1).  
Agriculture is also in relative decline although it remains a critical sector as it provides inputs to 
manufacturing and is the basis of Belize's main ex ports.  Toursim is also of growing importance.  
Although official statistics on its contribution to GDP are not available, the Inter-American Development Bank has estimated that tourism repr esented about 11% of GDP (Chapter IV(4)(vi)). 
Table I.2 
Structure of GDP, 2003-09 
(BZ$ million in constant 2000 or % of GDP) 
 2003 2004 2005 2006 2007 2008 2009 
GDP (BZ$ million) 2,006.8 2,099.0 2,163.1 2,263. 8 2,294.1 2, 377.7 2,377.6 
Primary activities 17.3 18.1 18.1 16.2 12.8 12.5 11.7 
of which:         
 Agriculture, hunting and forestry 10.6 11.3 10.9 10.3 10.0 9.8 9.3 
 Fishing 6.3 6.4 6.8 5.5 2.3 2.2 2.4 
Secondary activities 14.7 15.1 14.6 17.5 17.6 18.7 21.4 
of which:         
 Manufacturing (incl. mining and quarrying) 7.9 8.5 8.3 10.4 10.6 10.8 12.8 
 Electricity and water 3.3 3.1 3.0 4.0 4.0 4.0 4.7 
 Construction 3.6 3.6 3.3 3.1 3.0 3.9 4.6 
Tertiary 58.6 57.8 58.7 57.5 60.3 60.2 53.7 
of which:        
 Wholesale and retail trade 15.3 14.6 14.9 14.4 14.5 14.6 13.6 
 Hotels and restaurants 3.9 4.0 4.1 3.9 4.0 3.7 3.5 
Table I.2 (cont'd)Belize WT/TPR/S/238 
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 2003 2004 2005 2006 2007 2008 2009 
 Transport and communications 9.5 9.5 10.1 10.0 11.3 11.0 10.7 
 Other private services (excluding FISIM) 15.3 16.3 14.5 15.3 15.7 16.5 16.9 
 Producers of government services 9.6 9.3 9.1 8.3 8.5 8.6 9.0 
 
Note: The table does not include subsidies less taxes on products and, th erefore, the sum of sectoral activities does not add t o 100%. 
 
Source : Central Bank of Belize. 
6. The economy is vulnerable to exogenous shocks , including tropical storms, which can cause 
significant damage to infrastructure and agricultu re production.  In 2008, Tropical Depression 16 and 
Tropical Storm Arthur caused damage estimated at a total of 5.4% of GDP, in 2007 Hurricane Dean caused damage estimated at 3.7% of GDP, and in  2001 Hurricane Iris caused damage estimated at 
28.7% of GDP.
3  Soft loans from abroad and grants from bilateral sources and international 
organizations have helped recovery from these disasters. 
7. Belize's banking sector was not directly affected by the recent global financial crises.  
However, the economy was affected through the reduc tion in inflows of foreign direct investment, 
slower growth in foreign remittanc es, and a decline in stay-over tour ism.  The last of these had grown 
steadily to become one of the main sources of fore ign exchange earnings in Belize by the late 2000s 
having more than doubled since 2002.4  As a result of the decline in economic activity, there was an 
increase in non-performing loans particularly to th e tourism sector, which required the Central Bank 
to increase surveillance and on-site monitoring of commercial banks.  
8. The labour force continued to grow through out the period under review reaching 144,364 
persons in September 2009.  Increasing employment  opportunities meant that unemployment fell to 
8.2% of the workforce in early 2008 but the economic downturn in 2009 slowed down job creation 
which fell behind the growth of the labour force, and unemployment increased to 13.1% in early 2009 
before falling back to 12.6% in September 2009.   
                                                      
3 IMF (2009). 
4 Central Bank of Belize (2010) . WT/TPR/S/238 Trade Policy Review 
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Box. I.1:  Crude Oil Production in Belize  
Belize has a complicated geology that, over the years, has a ttracted some interest for oil exploration.  
However, until 2005, about 50 exploration oil wells had been drilled but no commercial reserves had been 
discovered.  In 2005, Belize Natural Energy (BNE) discovered a field in Spanish Lookout, which started 
production in 2006.  There are now ten wells in the field producing an estimated average of 5,000 barrels per 
day with reserves of 14 million barrels.   In 2007, another discovery was made at Never Delay and, in 2010, 
the find was declared commercial.  The oil is of high quality and is exported to Costa Rica and the United 
States for processing.  According to press reports, a small amount is mixed with diesel and used locally. 
Although small by inte rnational standards, oil production and expo rts are important to the Belizean economy.  
It represented 40% of the value of exports in 2008, but fell sharply to about 25% of total exports in 2009, due 
to lower oil prices.  Crude oil has also become important to government revenues with a number of different 
taxes charged, including a 40% income tax on oil produc tion activities, a 7.5% royalty, and an excise tax of 
BZ$1 per barrel.  When oil prices go over US$90 per barrel,  a petroleum surcharge can be applied but, so far, 
this has not been applied in Belize.  The State also has a 10% holding in BNE. 
As of February 2010, it was reported that 18 companies had petroleum exploration concessions covering a 
large part of the country.  A company can obtain an exploration licence from the Ministry of Natural 
Resources and the Environment.  The licence is valid fo r 2 years, renewable up to a total of 8 years.  A 
production licence is for 25 years with provisions to renew it for another 25 years to undertake production 
but, so far, only BNE has found oil. 
Oil will continue to be valuable to the Belizean economy, particularly it s contribution to diversification and 
as an alternative source of government revenues.  But,  given the nature of the business, it will not become a 
major source of employment.  Furthermore, as most taxes applied to petroleum activities are ad valorem,  the 
tax revenue will vary with oil prices.  Therefore, crude oil production is unlikely to have a major impact on 
economic development while agriculture and tourism will  continue to offer greater opportunities for long-
term development. 
Source: Belize Natural Energy Ltd on line information.  Viewed at:  
http://www.belizenaturalenergy.bz/ [August 2010];  UNSD Comtrade database; Central 
Bank of Belize, Annual Report 2009 ;  Belize.com online information.  Viewed at:  
http://www.belize.com/articles/o il-exploration-in-belize.html [August 2010];  and Economist 
Intelligence Unit (2010), Country Report Belize . 
 
(ii) Fiscal policy 
9. The Ministry of Finance is responsible for fiscal  policy.  The high level of public debt and the 
decline in revenue in 2009 due to the economic downturn have restricted fiscal flexibility in Belize.  
Current revenue, as a percentage of GDP, conti nued to increase throughout the period under review, 
rising from 20% in 2005 to nearly 26% in 2009.  Although revenue from income and profit taxes 
continued to increase in 2009, the downturn may lead  to continued reductions in revenue from excise 
duties and the General Sales Tax in 2010.  Tax es on international trade and transactions (mainly 
import duties) represent around 22% of total current revenue. 
10. In the previous Trade Policy Review of Belize it was noted that the Government intended to 
broaden the tax base.  However, in 2009, current revenue continued to depe nd on a narrow range of 
taxes, with the business tax, import duties, and th e General Sales Tax together contributing nearly 
60% to current revenues (see Table I.3).  New source s of current revenue have been created and some 
existing ones have increased in importance, for ex ample:  royalties from petroleum operations;  oil 
prospecting and mining licences; and gaming and casino licences all increased significantly from 2005.  However, despite the increase in revenue yi eld, they contributed only 2.5%, 0.4%, and 0.6% 
respectively, to current revenue in fiscal year 2008/09. Belize WT/TPR/S/238 
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11. Grants remain an important source of reve nue for the Government.  They reached BZ$96 
million in 2008-09 as several sources provided funding, including to help Belize recover from the damage caused by tropical storms.  However, the revenue from grants fell sharply in the following 
year, which has contributed to the increase in the government budget defici t in 2009-10, and it is 
expected to continue to fall in fiscal year 2010/11.  The Ministry of Finance not ed that in fiscal year 
2009, the current balance (current revenue less curre nt expenditure) was in surplus for the second year 
in a row, and the estimates for 2009-10 and the B udget for 2010-11 indicate that the Government 
intends to continue to run a surplus of  current revenue over current expenditure. 
Table I.3 
Government revenue and expend iture by fiscal year, 2004-10 
(BZ$ million) 
 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10a 2010/11b 
Tax Revenue        
Income and profits, of which: 99.8 129.5 138.2 180.1 196.8 207.3 247.5 
 PAYEc 32.0 35.4 38.1 44.8 50.1 54.1 53.1 
 Companies 0.7 0.1 0 11.1 20.0 26.1 31.6 
 Business tax 64.5 90.2 96.0 115.4 117.9 120.0 152.0 
Taxes on property 4.5 5.5 4.3 6.5 6.3 4.1 7.0 
Taxes on international trade and 
transactions, of which: 153.2 141.8 153.0 164.2 154.3 166.0 175.8 
 Import duties 74.1 79.6 85.2 91.9 105.3 129.4 133.5 
 Revenue replacement tax 74.6 56.7 61.4 49.4 18.1 9.0 9.3 
 Excise duties 9.7 19.4 0 6.2 6.1 4.1 4.2 
 Environmental tax 0 16.2 18.0 20.8 23.8 22.2 24.0 
Taxes on goods, transactions, and 
services, of which: 141.0 162.4 195.0 229.8 237.1 217.5 273.1 
 Stamp duties 15.7 21.7 25.1 24.4 20.5 23.2 23.9 
 Taxes on foreign exchange 8.5 9.4 11.1 14.0 14.7 14.2 14.6 
 Excise duties 0 0 22.1 16.2 24.6 20.2 20.8 
 General sales tax 116.4 130.7 158.3 174.8 176.5 155.0 207.0 
Non tax current revenue        
Licences 10.3 10.2 10.9 13.2 14.7 10.1 11.8 
Royalties, of which: 8.6 9.7 17.5 23.1 29.1 24.6 30.6 
 Royalties from petroleum opera tions 0 0 6.5 11. 2 17.0 14.1 18.0 
Ministries revenue 15.0 20.7 23.1 26.3 24.0 28.7 26.1 
Transfers 4.2 8.6 1.5 12.4 24.1 10.7 6.9 
Repayments of loans 5.0 10.4 7.6 9.3 7.0 5.7 5.4 
Dividends 1.2       
Current revenue total 441.7 498.7 551.0 665.0 686.4 674.6 784.3 
Capital revenue 5.6 67.0 5.1 20.8 4.4 4.2 4.8 
Grants 13.0 22.9 36.8 38.6 96.0 39.4 22.5 
Loans and receipts 109.0 109. 0 153.9 92.6 86. 2 89.9 100.5 
Total revenue 569.3 697.6 746.8 816.2 873.0 808.1 912.1 
Expenditure        
Current expenditure, of which: 503.5 543.6 600.9 601. 5 633.4 674.1 721.6 
 Debt service-interest and other 
 charges .. .. .. .. .. 106.0 118.8 
Capital expenditure 122.4 81.2 111.1 150.4 129.5 125.8 154.7 
 
.. Not available. 
 a Estimate. 
b Budget. 
c PAYE (Pay-as-you-earn):  Income tax paid by employees.  
Source : Ministry of Finance, Approved Estimates of Revenue and Expenditure. 
12. Belize's external debt remains high, at over BZ$2 billion (75% of GDP), while domestic debt 
is BZ$317 million (Table I.4).  The downturn in revenues in 2009 led to a 6% in crease in debt with all 
new borrowing coming from bilateral sources and mu ltilateral institutions.  A comprehensive debt WT/TPR/S/238 Trade Policy Review 
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restructuring in 2007 reduced the cost of servicing th e debt.  Nevertheless, while debt levels remain 
high the cost of servicing will also require significant resources.5  
Table I.4 
Public sector external debt outstanding by source, 31 December, 2004-09 
(BZ$ million)  
 2004 2005 2006 2007 2008 2009 
Bilateral 287.9 326.8 426.4 331.5 335.5 355.3 
Bonds 1,014.9 1,050.7 999.0 1,143.2 1,133.8 1,123.5 
Commercial banks 104.6 18.3 121.6 12.0 6.8 1.5 
Multilateral 378.5 414.4 422.9 458.7 439.5 551.0 
Suppliers' credit 1.7 1.4 0.0 0.0 0.0 0.0 
Total 1,787.6 1,941.6 1,970.1 1,945.4 1,915.6 2,031.3 
 
Source : Central Bank of Belize, Annual Report  (various issues) . 
13. Recent fiscal policy measures include the rest art of activities by the Development Finance 
Corporation in 2009 after five years without lending.   This followed the passing of a new Act in 
February 2009 to improve its indepe ndence and to put it under the supervision of the Central Bank.  In 
2009, the Central Bank provided a loan of BZ$1.5 million to the DFC for on-lending. 
14. In the 2010 Budget, the Government reduced capital spending and increased several taxes, 
including the GST, which was raised to 12.5% from 10%, introduced an excise tax on crude oil production of BZ$1 per barrel, and increased the business tax.  At the same time, the Budget 
announced a reduction in income taxes and removed the GST and import duties for certain food items. 
(iii) Monetary and exchange rate policy 
15. The Central Bank of Belize (CBB) is responsible for monetary and exchange rate policy.  The 
Bank was established in 1982 by the Central Bank of Belize Act and its  activities are governed by this 
Act and subsequent amendments (Chapter 262, 2003).
6  Under the Banks and Financial Institutions 
Act (BFIA) (Chapter 263, 2000)7, the CBB is also responsible for s upervision and regulation of banks 
and financial institutions in Belize.  Since De cember 2005, under the Credit Unions (Amendment) 
Act, 2005 credit unions have also come under the regulation and supervision of the CBB. 
16. Other legislation on financial regulation includes: 
− the Financial Intelligence Unit Act, 2002, which set up the Financial Intelligence Unit 
responsible for investigating and pro secuting financial crimes such as money 
laundering, internet fraud, and pyramid schemes;  and 
− the Money Laundering and Terrorism (Preve ntion) Act, 2008, which entered into 
force in January 2009, and improves provisions for the investigation and prosecution of crimes related to money laundering and terrorism.  The provisions also require 
mandatory record keeping and reporting obligations on fina ncial institutions.   
                                                     
 
5 Central Bank of Belize (2008) . 
6 Central Bank of Belize Act.  Viewed at:  http://www.centralbank.org.bz/ 
dms20uc/dynamicdata/docs/20030811161217_2.pdf [June 2010]. 
7 Banks and Financial Institutions Act.  Viewed at:  http://www.centralbank.org. 
bz/docs/20030811171201_2.pdf [June 2010]. Belize WT/TPR/S/238 
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17. The Financial Intelligence Unit reported that, in 2009, 78 suspicious tr ansaction reports were 
filed in 2009, 6 investigations we re conducted, 9 arrests were made  and, in January 2010, 1 money 
laundering conviction was awarded. 
18. Under the Central Bank of Belize Act, the CBB w as established as an autonomous institution.  
The Act sets out the Bank's objectives as being "gui ded in all of its actions by the objectives of 
fostering monetary stability, especially as regards st ability of the exchange rate, and promoting credit 
and exchange conditions conducive to  the growth of the economy of Belize".  The Act also fixes the 
exchange rate at two Belizean dollars  to one U.S. dollar (BZ$2 per US$). 
19. With the exchange rate fixed, the range of mone tary policy tools available to the Central Bank 
is limited and, in practice, it has used reserve requirements almost exclusively (Table I.5).  
Commercial banks are required to maintain seconda ry reserves, which include cash and Treasury 
notes, of 23% of average deposit liabilities (see Chapter IV(4)(ii)(b)).  
Table I.5 
Main monetary indicators, 2003-09 
  2003 2004 2005 2006 2007 2008 2009 
Money and credit (BZ$ million)        
M1 money supply 442.6 294.2 516.1 617.9 704.4 706.2 713.3 
M2 money supply 659.7 756.1 815.8 887.1 1,031.7 1,260.4 1,379.9 
Domestic credit 1,056.6 1,176.5 1,254.7 1,390.5 1,599.6 1,742.4 1,805.4 
Interest rates (weighted average)        
Deposit rate (annual average) 4.9 5.2 5.5 5.8 6.0 6.4 6.1 
Lending rate (annual average) 14.2 14.0 14.3 14.2 14.3 14.1 14.0 
Inflation        
Consumer price index (average % change) 2.6 3.1 3.7 4.2 2.3 6.4 -1.1 
Exchange rate        
Exchange rate, pegged (US$/BZ$) 2 2 2 2 2 2 2 
Real effective exchange rate index (annual % 
change) -2.5 -2.4 -1.3 0.9 -2.8 0.5 .. 
Terms of trade (annual % change) -2.0 -2.5 -5.9 -1.2 2.0 2.6 .. 
 
.. Not available.  
Source : Central Bank of Belize, Annual Reports . 
20. While the fixed exchange rate with the U.S. dollar is set out in the Central Bank of Belize 
Act, and it has been noted that this limits mone tary policy options, the IMF has stated that it has 
benefited Belize as a basis for macroeconomic policies and that the exchange rate is broadly in line 
with Belize's medium-term fundamentals.  However,  maintaining the fixed peg also requires fiscal 
restraint, in order to reduce risks associated with external debt, and adequate financial reserves to 
enable Belize to a ddress exogenous shocks. 
21. The rate of inflation in Belize can vary a lot from one year to another and is mainly 
influenced by import prices.  In the period 1998- 2009, the domestic factors influencing inflation 
included changes in tax rates, implementation of the C ET, and fiscal policies.  In the late 1990s, prices 
fell for two consecutive years before rising again in  the early 2000s.  From 2000 to 2006, inflation 
increased steadily and reached a peak of just ove r 4% in 2006.  In 2008-09, inflation tracked the 
changing prices of imports, rising in 2008 and falling in 2009 as oil and food prices rose and fell.  The 
decline in inflation in 2009 was also a result of the fall in consumer spending caused by the effects of 
the global financial crises. WT/TPR/S/238 Trade Policy Review 
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(iv) Balance of payments and external debt 
22. The current account remained in deficit througho ut the review period.  From 2003, there was 
a downward trend in the deficit that reached US $25.4 million in 2006 before climbing back to 
US$132.4 million in 2008.  The large deficit in trade in goods was the main contributor to the current 
account deficit; the surplus in trade in services was not large enough to overcome it.  The trade-in-
goods deficit fell in 2009 as consumption declin ed and imports fell faster than exports.  
23. The importance of remittances from abroad in creased significantly between 2003 and 2009, 
with an annual average increase of over 17%.  Alt hough the rate of growth fell considerably in 2009 
compared with 2008 it increased by 3.1% despite the economic downturn.  The continued growth in 
remittances can be contrasted to the sharp fall in ne t direct investment, which practically halved to 
about US$95 million in 2009 after havi ng grown strongly since 2004.   
24. After several years of decline Belize has been building up its foreign reserves since 2006.  In 
2005, these had reached a low point of 0.8 months of import cover but they had improved to 4.2 
months in 2009, partly due to a new allocation of Special Drawing Rights by the IMF.  An additional 
concern is that reduced consumption, which could im prove the current account deficit, could also lead 
to lower government revenues from reduced tax income.  
Table I.6  
Balance of payments, 2003-09  
(US$ million) 
 2003 2004 2005 2006 2007 2008 2009 
I.  Current account - 184.29 -154.92 -151. 22 -25.38 -52.09 -132.36 -93.32 
A.  Balance of goods and services -135.69 -84.09 -88.01 25.93 13.48 -91.29 -55.47 
 Balance of goods -206.84 -172.31 -230.99 -184.79 -216.44 -308.15 -238.65 
Credit 315.51 308.39 325.23 427.14 425.57 480.09 381.86 
Debit -522.34 -480.69 -556.22 -611.93 -642.02 -788.24 -620.51 
 Balance of services 71.15 88.22 142.98 210.72 229.92 216.86 183.18 
Exports 212.13 235.31 301.78 362.88 398.08 386.48 344.94 
Imports -140.98 -147.09 -158.79 -152.16 -168.16 -169.62 -161.76 
B.  Balance of income and transfers  -48.60 -70.84 -63.22 -51.32 -65.57 -41.07 -37,85 
 Net income -89.48 -116.74 -114.43 -125.28 -158.95 -152.62 -117.46 
 Net current transfers 40.88 45.91 51.21 73.97 93.39 111.55 79.61 
 Workers' remittances 29.67 31.21 40.92 57.85 70.76 74.13 76.43 
II.  Capital and financial account 188.48 127.27 147.30 83.24 123.65 235.71 120.00 
A.  Capital account 6.64 9.82 2.97 9.14 4.09 9.05 18.50 
B.  Financial account 181.85 117.45 144.33 74.10 119.56 226.66 101.51 
 Net direct investment -11.28 111.43 125.93 108.26 139.39 188.08 94.93 
 Changes in international reservesa 30.07 31.17 12.20 -49.82 -22.90 -57.90 -47.25 
III.  Errors and omissions -34.27 -3 .5 -8.28 -8.04 - 48.66 -45. 44 -20.57 
M e m o r a n d u m  i t e m s         
Gross official international rese rves 84.6 53.3 35.8 85.6 108.5 166.4 213.7 
Import cover of reserves (months) 2.1 1.4 0.8 1.8 2.3 2.8 4.2 
Current account/GDP (%) -18.65 -14.67 -13.56 -2.09 -4.08 -9.74 -6.89 
 
a A negative change corresponds to an incr ease in international reserves.  It incl udes changes in the reserve position and spec ial 
drawing rights in the IMF, but it does not include use of IMF credit. 
 
Source: IMF and Central Bank of Belize, Annual Reports , and IMF online data.  Viewed at:  
http://www.imf.org/exte rnal/np/sta/bop/bop.htm. Belize WT/TPR/S/238 
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(3) MERCHANDISE TRADE AND INVESTMENT FLOWS  
(i) Composition and geographical distribution of trade 
25. Although the value of exports from Belize grew  strongly from 2002 to 2008, they remained 
concentrated in a narrow range of products exporte d to a small number of countries.  Import growth 
was much stronger over the period (Tables AI.1 a nd AI.2).  According to the Central Bank, the 
economic slowdown in 2009 led to a reduction in bo th imports and exports in 2009, but imports fell 
further, meaning that the deficit in trade in go ods was reduced, although it remains quite large.   
26. With the demise of the clothing industry and the cessation of clothing exports, manufactured 
products fell from a peak of 13.5% of total exports in  2005 to about 1.4% in 2008.  Exports of frozen 
crustaceans also fell, from a peak of 27.2% of ex ports in 2003 to 7.3% in 2008 (Chart I.1) and 
remained at a similar level in 2009.  
27. On the other hand, exports of agricultural goods  increased considerably, from about US$175 
million in 2003 to US$290 million in 2008 (with a s light decline in 2009).  The rise was driven by 
increasing production of citrus fruits, papayas, and, to  a lesser extent, bananas.  Exports of sugar, 
which have varied from one year to the next , averaged about US$40 million from 2003 to 2008 but 
declined in relative importance as exports of other agriculture goods increased.  Practically all exports 
of citrus juice and papayas go to the United States while exports of sugar and bananas go to the EU.  
Exports of crude oil started in 2006 and increased  rapidly to US$118 million in 2008 before falling 
back as production stabilized in 2009.  Crude oil is exported for refining to the United States and Costa Rica (Table AI.3).  
28. Imports are much more broadly based than expor ts.  Agricultural products make up just over 
13% of imports, with spirits, durum wheat, and food preparations being the main items, although 
together account for only 3.7% of total imports, re flecting the broad base of agriculture and food 
imports.  Fuels are the main import item, and their im ports have increased steadily since 2002, rising 
from US$58 million to US$135 million in  2008, although this should ha ve fallen in 2009 with falling 
international prices. 
29. The main sources of imports are other countries in the region.  Almost half of all imports 
come from other countries in Central America and the Caribbean:  nearly 12% of all imports come from Netherlands Antilles (almost entirely fuels and lubr icants) (Table AI.4).  The United States is the 
single biggest source for imports, accounting just ov er a third of imports followed by (apart from 
Central America and the Caribbean) China, with 8% of imports (Chart I.2). 
 
 WT/TPR/S/238 Trade Policy Review 
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Chart I.1
Structure of merchandise trade, 2003 and 2008
2003 2008
(a)  Exports, including re-exports (f.o.b.)
Total:   US$203.8 million Total:  US$295.1 million
(b)  Imports (c.i.f.)
Total:   US$551.6 million Total:   US$836.5 millionPer cent
Source :  WTO Secretariat estimates, based on UNSD, Comtrade database figure (SITC Rev.3).Food
84.7Food
57.3
Manufactures
46.7Manufactures
47.6Orange juice 
16.5
Sugar beet 
and cane
17.6
Crustaceans, 
frozen
27.2Fuel
40.3Other food
10.4Machinery and 
transport equipment  
4.7
Food
11.9
Fuel
12.0
Iron and 
steel
1.9
Chemicals
7.5
Textiles and clothing 
1.6Other semi-
manufactures
8.8
Electrical 
machines
5.9Transport 
equipment
7.3Other 
consumer goods
8.5Food
12.7
Fuel
16.2
Other semi-
manufactures
9.5Non-electrical 
machinery
6.2Chemicals
7.1
Electrical 
machines
7.6Transport 
equipment
7.2Textiles and 
clothing
1.2Other 
consumer 
goods
5.3Other 
29.3Other 
23.5Other
2.6
Bananas, fresh 
or dried
13.1Clothing
7.6
Iron and 
steel
3.5
Non-electrical 
machinery
5.2Orange juice 
15.7
Sugar beet 
and cane
12.1
Crustaceans, 
frozen
7.3Other food
10.9Bananas, fresh 
or dried
11.3Fuel  0.3Other
2.4
 Belize WT/TPR/S/238 
 Page 11 
 
 
Chart I.2
Direction of merchandise trade, 2003 and 2008
2003 2008
(a) Exports, including re-exports (f.o.b.)
(b) Imports (c.i.f.)Per cent
Source:  WTO Secretariat estimates, based on UNSD, Comtrade database figure (SITC Rev.3).Total: US$551.6 millionUnited States
33.2
Panama  0.9Mexico  6.9
EU(27)
4.8Guatemala  
2.9Other 
America
8.2Other
28.5
China   0.9
Africa
10.1Netherlands 
Antilles 0.1America
52.4Total: US$203.8 millionUnited 
States
56.3
Other 
America
12.6Other 
EU(27)
2.1
United 
Kingdom
23.1Other
2.7
Netherlands
3.1
EU(27)
28.3
America
69.0
Total: US$295.1 million
Total: US$836.5 millionOther Asia  3.3United 
States
34.2
Panama
8.9
Mexico 
9.4EU(27)
5.4
Guatemala  
6.9Other 
America
9.7Other
0.8
China  
8.1
Africa  0.2
Netherlands 
Antilles 11.9America
81.0Other Asia 
4.5United 
States
45.0
Other 
America
9.8Other 
EU(27)
4.2
United 
Kingdom
19.6Other
1.6
Netherlands
3.0
EU(27)
26.8
America
71.6
Costa 
Rica
16.8
 WT/TPR/S/238 Trade Policy Review 
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(ii) Foreign direct investment 
30. According to UNCTAD, foreign direct investment (FDI) stock in Belize has been increasing 
steadily for many years and by 2009 FDI inward stoc k had grown to the equivalent of 86.3% of GDP.  
Inflows accelerated between 2006 and 2008, rising from US$109 million to US$191 million, mainly 
as a result of higher gross fixed capital formation in 2008 (Table I.7), and, despite falling to US$95 
million, remained significant in 2009. 
31. According to the Central Bank, the main des tination of foreign investment was petroleum 
exploration and production, followed by real estate, tourism, and electricity. 
Table I.7 
Foreign direct investment, 2003-09 
(US$ million) 
 2003 2004 2005 2006 2007 2008 2009 
FDI inflows 41.9 119 155 109 143 191 95 
% of gross capital formation 22.4 63.7 75.2 51.7 58.1 72.8 37.0 
FDI outflows 52.8 7.3 28.2 1.0 1.0 3.0 -
% of gross capital formation 28.2 3.9 13.7 0.4 0.4 1.1 0.2 
FDI inward stock 437 693 617 684 867 1,058 1,153 
% of GDP 43.5 66.2 57.7 56.4 67.9 77.8 86.3 
FDI outward stock 52 44 44 45 46 49 50 
% of GDP 4.2 4.2 4.1 3.7 3.6 3.6 3,7 
Cross border merger and acquisitions sales - 57 - - - - - 
Cross border merger and acquisitions purchases - 5 - 4 -43 - - 
 
Source : UNCTAD (2009, 2008, 2007, 2006, 2005), World Investment Report;  and Central Bank of Belize, Annual 
Reports . 
(4) OUTLOOK  
32. Belize has shown a cyclical tendency for economic growth driven by fiscal policies and 
government borrowing, leading to several years of relatively high economic growth, followed by 
fiscal corrections and lower growth.8  The country was emerging from one of these corrections when 
the effects of the global financial crises hit the economy.  Although external debt was restructured 
significantly in 2007, the cost of servicing it remains a major drain on government revenue and, along with lower tax revenue caused by the fall in consumer  demand, left little scope for any fiscal stimulus.  
The start of oil production in 2006, while a welc ome diversification of the economy and a boost to 
exports and government revenue , is unlikely to make a big difference to the economy. 
33. Despite the problems caused by government de bt and falling revenues, Belize's economy is 
expected to return to growth in 2010 led by a major expansion in electricity production, continued 
growth in crude oil extraction, and some recove ry in agricultural producti on and exports, consumer 
demand, and tourism.  However, the recovery ma y be weak and the balance-of-payments situation 
remains fragile with a large balance of trade defi cit covered by foreign direct investment, foreign 
remittances, and grants and loan s from bilateral sources and in ternational organizations.   
34. Belize will remain vulnerable to exogenous shocks, including weather-related disasters.  
Diversification of the economy would help to reduce dependence on a narrow range of exported 
commodities but this is limited by the po pulation base of only 333,000 people.   
                                                     
 
8 IMF (2006);  and Hasumann and Klinger (2007). Belize WT/TPR/S/238 
 Page 13 
 
 
35. On the other hand, several sectors offer consid erable scope for development.  With the 
second-largest corral reef in the world just offshor e, and relatively proximity to the United States, 
tourism, already a major contributor, has a lot of po tential.  Agriculture is  also a possible area for 
development.  Only a relatively small portion of po tentially productive land is currently under farming 
and, although preference erosion in the United Stat es and the European Union markets is a concern, 
there is considerable scope for expansion.   
36. The authorities are working on a long-term policy document, Horizon 2030, which is 
expected to emphasize macroeconomic stability, in vestment, and trade.  Along with the Medium-
Term Development Strategy 2010-13, Hori zon 2030 will provide a framework for policy 
development, which will contribute to econom ic growth and stability (Chapter II.6).