Prime Minister John Briceno says while 2023 had been an outstanding year for the public finances and for the economy of Belize, one of the complaints that his administration has had to deal with is the increase in the cost of living.
Briceno said that while the International Monetary Fund (IMF) is projecting that Belize is on a path to ongoing prosperity, prolonged full employment, lower inflation and public debt, with a strong Belize dollar underpinning sustainable budget cycles into the medium term, “one of the complaints I have heard most often while visiting Belizeans is the increase in the cost of living or inflation”.
Parliament is expected to debate the BDZ$1.51 billion (One Belize dollar=US$0.49 cents) budget presentation Briceno presented last Friday and during his presentation, the prime minister said that the e projection is for inflation to level off, and at least not outpace increases in wages.
“The inescapable fact is that domestic purchasing power has been eroded by an increase in international prices. This is an issue that Cabinet has grappled with constantly. I have listened to the anguish of Belizeans on this issue and I understand their frustration."
“The dollar is just not stretching the way it used to. But this is not the fault of the government,” Briceno said, noting that a recent in-depth analysis commissioned by the government showed that three-quarters of the price increases Belizeans endure come from imports.
He said for example, government has no control over the cost of flour, or fertilizer, or a barrel of petroleum, or steel for construction.
“Neither do we have control over the cost of shipping containers to Belize. What we have done to combat inflation is to put more money in the pockets of hourly wage workers,” he said, adding that 42,965 workers have received a BDZ$1.70 or 51 per cent per hour salary increase by the recent raising of the minimum wage to five dollars per hour.
He said the government has also reinstated the increments of public officers and has cracked down on price-gouging by greedy merchants.
“For example, as recently as the 28th of February, 35 businesses in San Pedro and Caye Caulker were handed citations by the Supplies Control Unit for pricing violations. This campaign will continue, as will our campaign to buy Belizean products, to make this country more self-sufficient."
“Cabinet and I will continue to take every step possible to control the erosion of the purchasing power of the Belize dollar,” Prime Minister Briceno said.
“Never should we abstain from the memory of where this administration met the public debt: 132 per cent at its peak in 2020, with the then UDP (United Democratic Party) government borrowing a million dollars a day just to meet the salaries of public officers."
“Today, the debt is projected to stand at 58 per cent of GDP in 2029. And it was this government’s good credit standing that allowed us to access the financing in 2023 to purchase the Port of Belize and return that prized asset to public ownership.”
Prime Minister Briceno said that the decisive move resulted in a rise in the domestic debt to BDZ$1.508 billion.
He said that the external debt at the close of 2023 stood at BDZ.832 billion and that in 2023, government paid BDZ101.1 million dollars in interest payments and almost an identical amount, BDZ$100.7 million in principal repayments.
“There are two very important debt conditions to highlight: first, the effective interest rate on the public debt is 2.3 per cent, a rate that by any measure is spectacularly low. This low rate is not a stroke of luck,” he said, adding “it is the result of prudent borrowing from only the most concessionary sources, namely multilateral and bilateral lenders."
“This government has recoiled from any form of commercial borrowing, conscious always of minimizing the price attendant to public loans. Because of this diligence, interest payment on the public debt is not projected to exceed 2.2 per cent of GDP well into the next decade.”
Prime Minister Briceno said that the second notable condition is that interest payment in 2023 represented seven cents of every dollar of revenue and grants.
“That figure is 17 cents in the US for 2024. 10 cents for the UK. 13 cents in Jamaica,” he told legislators.
BELMOPAN, Belize, Mar 11, CMC –
CMC/af/ir/2024