Subchapters:
- Basic data
- Public finances and the state budget
- Banking system
- Tax System
Basic data
Belize ranks among the most indebted countries in the world in terms of public debt to GDP. The economy of the country was very badly shaken by the pandemic, mainly thanks to the near-stopping of tourism, which is one of the most important parts of the Belize economy. The pandemic had a very strong effect on the increase in unemployment (13.7%) and also on the decrease in GDP growth (-14.1%). Within Central America, Belize is the smallest economy, mainly due to its low population. Check ebizdir for economical facts of Belize.
Among the most important sectors of the Belize economy are agriculture and related industries, fishing, tourism, and more recently construction and oil extraction. Belize’s top exports include sugar, citrus, bananas, seafood and oil. In terms of imports, Belize imports the most oil, tobacco and automobiles. The largest trading partners for imports are the USA, China, Mexico and Guatemala.
In 2020, 18% of people worked in the primary sector, 17% in the secondary and 65% in services. In recent years, we can especially observe the growth of services at the expense of the primary sector, the secondary sector is more or less unchanged.
| Pointer | 2018 | 2019 | 2020 | 2021 | 2022 |
| GDP growth (%) | 2.1 | 0.3 | -14.0 | 5.0 | 6.5 |
| GDP/population (USD/PPP) | 7,350.7 | 7,310.0 | 6,150.0 | 6,450.0 | 6,850.0 |
| Inflation (%) | 0.3 | 0.2 | 0.0 | 0.1 | 0.8 |
| Unemployment (%) | 6.5 | 6.5 | 7,8 | ON | ON |
| Export of goods (billion USD) | 0.5 | 0.5 | 0.4 | 0.4 | 0.5 |
| Import of goods (billion USD) | 0.9 | 1.0 | 0.8 | 0.9 | 1.1 |
| Trade Balance (Billion USD) | -0.5 | -0.5 | -0.4 | -0.5 | -0.6 |
| Industrial production (% change) | ON | ON | ON | ON | ON |
| Population (millions) | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 |
| Competitiveness | ON | ON | ON | ON | ON |
| OECD export risk | ON | ON | ON | ON | ON |
Source: EIU, OECD, WEF
Public finance and state budget
| Public finance | |
| State budget balance (% of GDP) | -(year 2019) |
| Public debt (% of GDP) | 125.8 |
| Current account balance (billion USD) | -0.2 |
| Taxes | |
| AFTER | over $10,000 per year – 25% |
| F.O | ranges from 0.75% to 15% |
| VAT | 14.1% |
The economy of Belize is based mainly on tourism, agriculture and fishing, processing of agricultural products and oil production.
In January 2013, the Act on Domestic Banking and Financial Institutions was revised, strengthening the role of the central bank. In March 2013, the state debt was restructured – the maturity of the bonds was moved from 2029 to 2038, the interest rate was reduced from 8.5% to 5%, saving USD 130 million. In 2020, GDP fell by 14.1%, mainly due to the pandemic and related problems (decline in tourism, which is very important for Belize). The inflation rate in 2020 was 0.8%. The unemployment rate was 13.7% in September 2020.
Foreign exchange reserves for 2019 amounted to USD 277.8 million, which was about 6% less than in 2018, when foreign exchange reserves amounted to USD 29 million. Public debt to GDP reached almost 126% in 2020, making Belize one of the most indebted countries in the world in this regard, as of 2019, public debt to GDP has increased by 28.3%. In 2019, the deficit of the state budget in relation to GDP reached approximately -3.9%, in 2020, according to estimates, the deficit should be around -10%.
Belize’s foreign debt stood at $1,300 million in 2019 and is expected to reach around $1,500 million in 2020. Debt service in 2019 reached a value of approx. 6% of GDP.
Banking system
The Belize banking system consists of the Central Bank of Belize (CBB, established in 1982) and 58 financial institutions:
- 5 commercial banks
- 4 foreign banks
- 1 state financial institution (The Development Finance Corporation – DFC) 15 so-called credit unions
- 3 construction companies
- 17 insurance companies
- 1 state savings bank 1 state bank for small farmers and traders
- 11 exchange offices
The possibility of financing economic activities is limited to the provision of short-term loans. Local bank interest rates are high, around 13% for mortgages and 17% for personal loans. Loans for economic development are provided by DFC, the most preferred sectors are tourism, agriculture and construction. To finance development projects, Belize uses development agencies and banks, especially the World Bank (WB), the Inter-American Development Bank (IADB) or the Caribbean Development Bank (CDB). Funding is provided for projects that contribute to reducing poverty, improving the healthcare system, education or in the area of infrastructure modernization.
Even though the EU only removed the country from the list of countries not cooperating with the EU in tax matters in 2019, Belize is often referred to as a tax haven and a country that systematically supports money laundering.
Banks and financial institutions in Belize: Central Bank of Belize, Atlantic Bank Ltd., Barclays Bank PLC, Bank of Nova Scotia, Belize Bank Ltd., Alliance Bank of Belize
Tax system
Income tax – annual income up to $10,000 is exempt; incomes above this limit are taxed at 25%.
Business tax – paid by shops, trading companies and self-employed entrepreneurs from their profits. Its amount varies, depending on the type of business, from 0.75% to 15%. The vast majority of business activities are taxed at a rate of 1.25%. Annual profits from business up to DKK 27,000 are exempt from business tax. USD, monthly rental profits up to USD 825 and profits from doing business in free trade zones. Income tax is administered by the Income Tax Department.
Sales tax – based on the Sales Tax Act of 1999, manufacturers and service providers whose monthly revenues exceed thousand USD or annual 27 thousand. USD, must register as sales tax agents. This tax is applied depending on the type of product and the nature of the service provided and is paid monthly. Sales tax rates are as follows:
- 12% alcohol, tobacco, oil derivatives;
- 9% other products and services.
Electricity and water supplies, imports into free trade zones, export of goods, hotel accommodation, goods and services paid for from foreign development funds, basic foodstuffs (e.g. rice, beans, maize, meat, sugar, eggs, bread) are exempted drugs, fertilizers, pesticides, fungicides, herbicides, fish, seed. All imported products are subject to sales tax.
Environmental tax – levied on imports in the amount of 1% of the CIF value. This tax was introduced in 2001 under the Environmental Tax Act. Sales tax is administered by the Sales Tax Department. 38% of revenue comes from import taxes, 30% from service tax and 22% from income tax. Even though the EU only removed the country from the list of countries not cooperating with the EU in tax matters in 2019, Belize is often referred to as a tax haven and a country that systematically supports money laundering.
